[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





    MADE IN AMERICA: INNOVATIONS IN JOB CREATION AND ECONOMIC GROWTH

=======================================================================

                                HEARING

                               BEFORE THE

           SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 3, 2011

                               __________

                           Serial No. 112-15









      Printed for the use of the Committee on Energy and Commerce

                       energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                Chairman
JOE BARTON, Texas                     HENRY A. WAXMAN, California
  Chairman Emeritus                     Ranking Member
CLIFF STEARNS, Florida                JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                EDWARD J. MARKEY, Massachusetts
JOHN SHIMKUS, Illinois                EDOLPHUS TOWNS, New York
JOSEPH R. PITTS, Pennsylvania         FRANK PALLONE, Jr., New Jersey
MARY BONO MACK, California            BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon                   ANNA G. ESHOO, California
LEE TERRY, Nebraska                   ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan                 GENE GREEN, Texas
SUE WILKINS MYRICK, North Carolina    DIANA DeGETTE, Colorado
  Vice Chair                          LOIS CAPPS, California
JOHN SULLIVAN, Oklahoma               MICHAEL F. DOYLE, Pennsylvania
TIM MURPHY, Pennsylvania              JAN SCHAKOWSKY, Illinois
MICHAEL C. BURGESS, Texas             CHARLES A. GONZALEZ, Texas
MARSHA BLACKBURN, Tennessee           JAY INSLEE, Washington
BRIAN BILBRAY, California             TAMMY BALDWIN, Wisconsin
CHARLES F. BASS, New Hampshire        MIKE ROSS, Arkansas
PHIL GINGREY, Georgia                 ANTHONY D. WEINER, New York
STEVE SCALISE, Louisiana              JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                 G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington    JOHN BARROW, Georgia
GREGG HARPER, Mississippi             DORIS O. MATSUI, California
LEONARD LANCE, New Jersey             
BILL CASSIDY, Louisiana               
BRETT GUTHRIE, Kentucky               
PETE OLSON, Texas                     
DAVID B. McKINLEY, West Virginia      
CORY GARDNER, Colorado                
MIKE POMPEO, Kansas                   
ADAM KINZINGER, Illinois              
MORGAN GRIFFITH, Virginia           


                                  _____

           Subcommittee on Commerce, Manufacturing, and Trade

                       MARY BONO MACK, California
                                 Chairman
MARSHA BLACKBURN, Tennessee          G.K. BUTTERFIELD, North Carolina
  Vice Chairman                        Ranking Member
CLIFF STEARNS, Florida               CHARLES A. GONZALEZ, Texas
CHARLES F. BASS, New Hampshire       JIM MATHESON, Utah
GREGG HARPER, Mississippi            JOHN D. DINGELL, Michigan
LEONARD LANCE, New Jersey            EDOLPHUS TOWNS, New York
BILL CASSIDY, Louisiana              BOBBY L. RUSH, Illinois
BRETT GUTHRIE, Kentucky              JANICE D. SCHAKOWSKY, Illinois
PETE OLSON, Texas                    MIKE ROSS, Arkansas
DAVID B. McKINLEY, West Virginia     HENRY A. WAXMAN, California (ex 
MIKE POMPEO, Kansas                      officio)
ADAM KINZINGER, Illinois
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)









                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Mary Bono Mack, a Representative in Congress from the State 
  of California, opening statement...............................     1
    Prepared statement...........................................     3
Hon. G.K. Butterfield, a Representative in Congress from the 
  State of North Carolina, opening statement.....................     4
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     8
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................   219

                               Witnesses

John Fernandez, Assistant Secretary of Commerce, Economic 
  Development Administration, Department of Commerce.............     9
    Prepared statement...........................................    11
    Answers to submitted questions...............................   222
Christopher Cummiskey, Commissioner, Georgia Department of 
  Economic Development...........................................    35
    Prepared statement...........................................    38
    Answers to submitted questions...............................   238
Drew Greenblatt, President and Owner, Marlin Steel Wire Products, 
  LLC, on behalf of the National Association of Manufacturers....    46
    Prepared statement...........................................    48
    Answers to submitted questions \1\...........................
Douglas Holtz-Eakin, President, American Action Forum............    59
    Prepared statement...........................................    61
    Answers to submitted questions...............................   240
Gregory Wilson, Special Advisor, The Financial Services 
  Roundtable.....................................................    70
    Prepared statement...........................................    72
Deborah L. Wince-Smith, President and CEO, Council on 
  Competitiveness................................................   108
    Prepared statement...........................................   110
    Answers to submitted questions...............................   244
Heather Boushey, Senior Economist, Center for American Progress..   151
    Prepared statement...........................................   153
Rhone Resch, President and CEO, Solar Energy Industries 
  Association....................................................   174
    Prepared statement...........................................   176
    Answers to submitted questions...............................   248

                           Submitted Material

Executive Summary by Bortz Media & Sports Group on the cable 
  industry's economic impact, submitted by Mrs. Bono Mack........   208
Statement of Matt Blunt, President, American Automotive Policy 
  Council, submitted by Mrs. Bono Mack...........................   215
Letter, dated March 3, 2011, from Mrs. Blackburn to Mr. Fernandez   221

----------
\1\ Mr. Greenblatt did not answer submitted questions for the 
  record.

 
    MADE IN AMERICA: INNOVATIONS IN JOB CREATION AND ECONOMIC GROWTH

                              ----------                              


                        THURSDAY, MARCH 3, 2011

                  House of Representatives,
      Subcommittee on Oversight and Investigations,
                           Committee on Energy and Commerce
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:06 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Mary Bono 
Mack (chairwoman of the subcommittee) presiding.
    Members present: Representatives Bono Mack, Blackburn, 
Harper, Cassidy, Guthrie, McKinley, Pompeo, Kinzinger, Barton, 
Butterfield, Towns, Rush, Schakowsky and Waxman (ex officio).
    Staff present: Gib Mullan, Chief Counsel, Commerce, 
Manufacturing, and Trade; Brian McCullough, Professional Staff 
Member; Shannon Weinberg, Counsel; Robert Frisby, Detailee; and 
Paul Cancienne, Policy Coordinator, Commerce, Manufacturing, 
and Trade.
    Mrs. Bono Mack. The subcommittee will come to order.
    Good morning, and welcome to this hearing of the House 
Subcommittee on Commerce, Manufacturing, and Trade.
    Today, stubbornly high unemployment continues to have a 
chokehold on the American economy. In the months ahead, our 
subcommittee will be taking a close look at some of the 
impediments to progress and the keys to a more prosperous 
America. The chair will now recognize herself for an opening 
statement and officially come to order.

 OPENING STATEMENT OF HON. MARY BONO MACK, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Bono Mack. We have a unique opportunity to make ``Made 
in America'' matter again. If we as a Congress and as a Nation 
are truly serious about creating the kind of positive 
legislative and regulatory environment needed to create new 
jobs as well as to bring back jobs to the United States from 
abroad, there are some commonsense steps that we should take 
right now. As chairman of this subcommittee, which has 
jurisdiction over interstate and foreign commerce, I am hoping 
to make job creation one of our top priorities.
    After a record 20 straight months of unemployment above 9 
percent, it is time to finally free American innovation and 
ingenuity long held hostage by a regulatory regime which is as 
great a threat to our prosperity as is any foreign regime. 
Today, U.S. businesses are holding tight onto more than $1.8 
trillion in cash reserves. Let us give them a reason to invest 
that money in America's future. Here are some of the things we 
should do immediately.
    First, let us ensure regulatory fairness. Rules and 
regulations imposed by Washington cost Americans more than 
$1.75 trillion each year, or about $15,500 per household. 
Moving forward, we should complete a top-to-bottom review of 
all regulations, scrubbing every outdated and senseless 
regulatory requirement off the books. Next, place a moratorium 
on any job-killing regulations and establish a more fair and 
transparent review process. And finally, require Congressional 
approval for all major rules and regulations imposing 
significant new costs on the economy.
    Second, we need to make intellectual-property protection a 
top priority. By most estimates, the theft of U.S. intellectual 
property costs our economy hundreds of billions of dollars a 
year but the real damage, both in terms of lost jobs and 
stalled progress, is impossible to calculate. Most sinister, 
this is deflating to our Nation's entrepreneurial spirit and 
psyche. Simply put, our Nation's economy cannot thrive in a 
world of no-cost competitors.
    Third, let us incentivize and reward innovation. According 
to a recent report by the Information Technology and Innovation 
Foundation, the United States ranked sixth among 40 nations in 
innovation-based competitiveness but were dead last in progress 
made over the past decade--dead last. There are smart ways to 
use the U.S. Tax Code and patent laws to reward companies that 
create new jobs and keep those jobs here in America.
    Fourth, we need to open more foreign markets to U.S. 
products. We simply cannot sit on the sidelines while other 
nations sign free-trade agreements and gain a foothold in 
promising new markets. Long-stalled trade promotion agreements 
with South Korea, Colombia and Panama should move forward 
quickly. Years of lost opportunities have only resulted in 
thousands of lost jobs. It is time to quit playing politics 
with our trade policies.
    Fifth, we should embrace vigorous oversight of new laws and 
agencies. Aggressive oversight doesn't have to be a political 
parlor game. Rather, we should see these as beneficial 
opportunities to get it right. Americans want and deserve our 
best efforts. Oversight hearings, which this subcommittee will 
be holding this year, are a unique opportunity to see what is 
working and what is not. And at the end of the day, we must 
have the political courage to embrace change that is not always 
popular but necessary.
    Finally, let us make in-sourcing in vogue. Frankly, I am 
tired of hearing people say the jobs are gone and they are not 
coming back. Outsourcing is not a one-way street. By providing 
a stable and predictable regulatory framework, by protecting 
intellectual property, by incentivizing and rewarding 
innovation and by opening more foreign markets to our products, 
we can not only end the exodus of jobs overseas but also begin 
the process of bringing some of those jobs back home to 
America.
    In fact, it has already started. GE, General Motors, Ford, 
Boeing, Delta Airlines, Master Lock and Caterpillar are just a 
few of the companies that are embracing in-sourcing. They 
should be applauded and other U.S. companies encouraged to 
follow suit. During the course of this entire week, ABC News 
has been taking an in-depth look at how buying ``Made in 
America'' can translate into millions of new jobs across the 
United States.
    Today, we are at an important crossroads in our Nation's 
history. The way forward is clear: creating new jobs and 
preserving existing jobs here at home should be our top 
priority. It will strengthen our economy, reduce the deficit, 
enhance U.S. competitiveness and restore pride in ''Made in 
America.'' For this subcommittee, there can be no greater 
legacy.
    [The prepared statement of Mrs. Bono Mack follows:]

               Prepared Statement of Hon. Mary Bono Mack

    We have a unique opportunity to make "Made in America" 
matter again. If we, as a Congress and a nation, are truly 
serious about creating the kind of positive legislative and 
regulatory environment needed to create new jobs--as well as to 
bring jobs back to the United States from abroad--there are 
some common-sense steps that we should take right now. As 
Chairman of this Subcommittee, which has jurisdiction over 
interstate and foreign commerce, I am hoping to make job 
creation one of our top priorities.
    After a record 20 straight months of unemployment above 9 
percent, it's time to finally free American innovation and 
ingenuity--long held hostage by a regulatory regime which is as 
great a threat to our prosperity as any foreign regime. Today, 
U.S. businesses are holding tight onto more than $1.8 trillion 
in cash reserves. Let's give them a reason to invest that money 
in America's future. Here are some things we should do 
immediately.
    First, let's ensure regulatory fairness. Rules and 
regulations imposed by Washington cost Americans more than 
$1.75 trillion each year or about $15,500 per household. Moving 
forward we should complete a top-to-bottom review of all 
regulations, scrubbing every outdated and senseless regulatory 
requirement off the books. Next.place a moratorium on any job-
killing regulations and establish a more fair and transparent 
review process. And, finally, require Congressional approval 
for all major rules and regulations imposing significant new 
costs on the economy.
    Second, we need to make intellectual property protection a 
top priority. By most estimates, the theft of U.S. intellectual 
property costs our economy hundreds of billions of dollars a 
year, but the real damage--both in terms of lost jobs and 
stalled progress--is impossible to calculate. Most sinister, 
this is deflating to our nation's entrepreneurial spirit and 
psyche. Simply put, our nation's economy cannot thrive in a 
world of "no cost" competitors.
    Third, let's incentivize and reward innovation. According 
to a recent report by the Information Technology and Innovation 
Foundation, the United States ranked sixth among 40 nations in 
"innovation-based competitiveness." But we were dead last in 
progress made over the past decade. Dead last. There are smart 
ways to use the U.S. Tax Code and patent laws to reward 
companies that create new jobs and keep those jobs here in 
America.
    Fourth, we need to open more foreign markets to U.S. 
products. We simply can't sit on the sidelines while other 
nations sign free trade agreements and gain a foothold in 
promising, new markets. Long-stalled trade promotion agreements 
with South Korea, Colombia and Panama should move forward 
quickly. Years of lost opportunities have only resulted in 
thousands of lost jobs. It's time to quit playing politics with 
our trade policies.
    Fifth, we should embrace vigorous oversight of new laws and 
agencies. Aggressive oversight doesn't have to be a political 
parlor game. Rather, we should see these as beneficial 
opportunities to "get it right." Americans want--and deserve--
our best efforts. Oversight hearings, which this subcommittee 
will be holding this year, are a unique opportunity to see 
what's working and what's not. And, at the end of the day, we 
must have the political courage to embrace change that's not 
always popular but necessary.
    Finally, let's make "insourcing" in vogue. Frankly, I am 
tired of hearing people say, "The jobs are gone, and they are 
not coming back." Outsourcing is not a one way street. By 
providing a stable and predictable regulatory framework.by 
protecting intellectual property. by incentivizing and 
rewarding innovation. and by opening more foreign markets to 
our products--we not only can end the exodus of jobs overseas, 
but also begin the process of bringing some of those jobs back 
home to America. In fact, it has already started. General 
Electric, General Motors, Ford, Boeing, Delta Airlines, Master 
Lock and Caterpillar are just a few of the companies that are 
embracing "insourcing." They should be applauded and other U.S. 
companies encouraged to follow suit.
    In fact, during the course of this entire week, ABC News 
has been taking an in-depth look at how buying "Made in 
America" can translate into millions of new jobs across the 
United States.
    Today, we are at an important crossroads in our nation's 
history. The way forward is clear: creating new jobs and 
preserving existing jobs here at home should be our top 
priority. It will strengthen our economy, reduce the deficit, 
enhance U.S. competiveness and restore pride in "Made in 
America." For this subcommittee, there can be no greater 
legacy.

    Mrs. Bono Mack. And now I would like to yield back my time 
and recognize the gentleman from North Carolina, the ranking 
member, Mr. Butterfield, for 5 minutes.

OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE STATE OF NORTH CAROLINA

    Mr. Butterfield. Thank you, Madam Chairman. Thank you very 
much for convening this very important hearing today, and let 
me just say that this conversation is certainly very timely.
    Helping unemployed Americans get back to work must be our 
agenda of Democrats and Republicans. Millions of Americans are 
out of work through no fault of their own. They are unable to 
pay their bills, much less save for retirement or their 
children's education. Some Americans are even forced to choose 
between feeding themselves or taking the medicines they 
deserve. This is unacceptable. Given the state of the economy, 
we must leave no stone unturned in our search for policies that 
can promote hiring and bring jobs to those who need them.
    The Recovery Act was a good first step. Some have 
questioned the wisdom of this investment. The country's most 
respected economists, however, agree that there would have been 
significantly slower growth and higher unemployment if this 
investment had not been made. It is working. It is working in 
my district and I pray that it is working in your district.
    You will hear me say repeatedly while we serve together 
that I represent the fourth-poorest district in America. It is 
mostly a rural area in eastern North Carolina. Many of my 
constituents who are lucky enough to have a computer and 
Internet connection at home use dial-up service, and because of 
relatively low population density, there is little incentive 
for companies to build the necessary middle-mile infrastructure 
to reach these areas. In this day and age, how is someone in a 
rural area supposed to start or grow a successful business or 
learn high-tech skills in school without access to broadband 
Internet? The NTIA fortunately saw the need that existed and 
awarded two stimulus grants for broadband infrastructure that 
will bring high-speed Internet capacity to tens of thousands of 
my unserved and underserved communities.
    The economy is now beginning to create more jobs each month 
than it sheds. Certain parts of the economy have returned to 
profitability but this upturn has not resulted in America's 
companies investing in new hires. I suppose they are waiting 
for market certainty and Congressional certainty. While they 
wait, too many Americans are still suffering. It is time for us 
to take the second step. The Federal Government must engage, 
not through another stimulus but through targeted, strategic 
investments like rural North Carolina's broadband grants that 
have the potential to create jobs in the short term, support 
long-term national priorities and provide a competitive 
business climate for the successful industries of the future. 
Investments in three particular areas stand out as building 
blocks. Research and development is certainly where we begin, 
infrastructure and education, especially STEM education. I am 
fully committed to getting our fiscal house in order. I think 
we all are. And I believe the President has made clear that he 
is as well. But reducing the deficit will come only through a 
serious look at the government's long-term obligations, not 
through rapid across-the-board cuts. It is not inconsistent to 
make tough choices about necessary cuts at the same time that 
we identify critical strategic investments in our country's 
future.
    And so I look forward to a robust discussion and receiving 
the testimony of the Assistant Secretary, whom we welcome 
today, and the witnesses on the second panel. The fact remains 
and it is very clear, we must create the opportunity for 
business and industry to create 7 million jobs to get the 
economy back where it was before the recession. It will take 
innovative approaches to get there. We will not get there if we 
continue to be mired in partisan brinksmanship. The American 
people are demanding, they are demanding bipartisan solutions 
to these complex American problems, and that is why I 
congratulate the chairman for convening this hearing today. I 
welcome all of the witnesses and I look forward to their 
testimony.
    I yield back, Madam Chairman.
    Mrs. Bono Mack. Thank you.
    Chairman Upton, he yielded his 5 minutes for his opening 
statement to me in accordance with committee rules, and as his 
designee, I would like to recognize Ms. Blackburn, the vice 
chairman of the subcommittee, for 2 minutes.
    Mrs. Blackburn. Thank you, Madam Chairman. I thank you for 
that well-stated opening statement that sets the playing field 
for this hearing.
    The other night, I was watching a documentary on Ronald 
Reagan. We have all been looking at the centennial of his 
birth, and I was reminded of a statement that he said during 
the 1980 campaign, and it was that a recession is when your 
neighbor loses his job, a depression is when you lose your job 
and recovery is when Jimmy Carter loses his job. Now, 
unfortunately, we can't sit around and wait for a change in 
Administration to begin this recovery. So Madam Chairman, as 
you said in your statement, it is time for us to do some things 
differently and to make some well-placed changes.
    I have to disagree with my colleague from North Carolina 
that the stimulus bill was a good first step. When you talk to 
people in my district, which I do every single week, they are 
telling me that there is a lot wrong, and when you have a 
stimulus bill that has unemployment above 9 percent over 21 
months of this, when you have got underunemployment even higher 
up in 15, 17, 20 percent, depending on where you are, it says 
things are not right. What we hear from our constituents and 
what I am hearing in the listening sessions that I am holding 
every week in my district, what I hear from people is that the 
long arm of government with regulation is killing the 
incentives to create jobs. What I am hearing is uncertainty on 
tax and regulatory policy is a killer when it comes to creating 
and retaining or expanding jobs. What we are hearing is that 
they want government to get out of the way, to provide some 
certainty, and they want us to focus on creating the 
environment that will allow job growth to take place
    I thank the chairman. I yield back my time.
    Mrs. Bono Mack. I thank the gentlelady.
    Now I would like to recognize the chairman emeritus of the 
committee for 2 minutes, Mr. Barton.
    Mr. Barton. Thank you, Madam Chairwoman. We appreciate you 
holding this hearing. We welcome our witnesses, the Hon. 
Assistant Secretary Fernandez and our witnesses on the private 
sector panel after that.
    Downstairs we are having a food fight on health care with 
the Secretary of Health and Human Services. There is quite a 
disagreement between the Republicans and the Minority on that 
issue. But on this issue, there should be agreement on both 
sides of the aisle that we actually do all support the creation 
of jobs and the creation of a robust economy.
    We tend to be gloomy and doomy when we talk about the 
ability of our economy to create jobs, and it is true that we 
have been in a recession the last several years. Having said 
that, on the positive side, unless one of our expert witnesses 
corrects me, my understanding is that our manufacturing sector 
produced more goods and services last year than any year in 
history. My perception is that in terms of productivity per 
worker, the American worker is still the most productive worker 
in the world. My perception is that in terms of productivity 
increase, we have doubled and perhaps tripled the productivity 
of the average American worker in the last 20 to 25 years.
    So we do have an economy that has a robust manufacturing 
capability. Having said that, we have the ability in Washington 
by high taxes, by regulatory overkill to stifle and threaten 
that productivity. So hopefully this hearing will give us some 
roadmaps about how to increase productivity, how to unleash the 
economic entrepreneurship of America and how to keep us number 
one and make us more competitive in the world markets.
    With that, Madam Chairwoman, I yield back.
    Mrs. Bono Mack. I thank the gentleman.
    Mr. Butterfield. Madam Chairman?
    Mrs. Bono Mack. Before we go to your side, I would like to 
recognize for the last minute a new member of the committee, 
Mr. Guthrie from Kentucky.
    Mr. Guthrie. Thank you, Madam Chairwoman.
    I come from a small business and manufacturing background 
and know firsthand what is needed to allow job creators to 
remain competitive. We cannot be a country that does not make 
things. As a manufacturer, I am familiar with the very serious 
uncertainty that our job creators face today, many of which we 
will be discussing in this committee.
    Today we live in the world's most productive economy but we 
can't take it for granted. The United States faces greater 
competitor as our business sees every day from China, India, 
Brazil and the EU, and I applaud the chairwoman's willingness 
to reopen the book on our economic policy with an eye towards 
innovation and job creation. I look forward to reevaluating the 
related policies within the committee's jurisdiction. It is 
fitting that Congress does the same, although I do hear mostly 
from people and from businesses I am familiar with is not just 
concern about what Congress is doing but the excess regulatory 
burden that is coming from the Administration. They say didn't 
we just have an election but we are still hearing these things 
are coming forward after they felt like they made a correction 
in the election.
    So we look forward to discussing where the Administration 
is going with that, and I yield back.
    Mrs. Bono Mack. I thank the gentleman.
    Mr. Butterfield. Madam Chairman?
    Mrs. Bono Mack. Yes?
    Mr. Butterfield. Madam Chairman, it appears that the 
gentlelady from Illinois has arrived, and in the absence of the 
ranking member of the full committee, I would ask unanimous 
consent that she be allowed to use the time that Mr. Waxman 
would have otherwise used.
    Mrs. Bono Mack. Without objection, the gentlelady is 
recognized for 5 minutes.
    Ms. Schakowsky. Thank you, Madam Chairman and Ranking 
Member.
    I am so glad that we are here today to talk about jobs 
because frankly, from my point of view, from my perspective, 
the new Majority has done absolutely nothing to create jobs for 
the American people since they have been in charge. Quite to 
the contrary, instead, they want to gut federal programs in a 
way that economists say will eliminate jobs, slow our economic 
growth and put hardship on the American people and spend time 
doing things like conducting a radical social campaign against 
women and family planning.
    Yesterday, Ben Bernanke said that under Republicans' 
Continuing Resolution, we could lose ``a couple hundred 
thousand jobs.'' Economist Mark Zandi, who was an advisor to 
John McCain, has said the bill could cost us 700,000 jobs. And 
even Goldman Sachs, not that I am a fan of Goldman Sachs, but 
they have estimated that it could cut our gross domestic 
product by 2 percent. And the Republican response so far has 
been so be it. And Americans deserve better than that. We need 
to make investments in our Nation by building a strong 
infrastructure, educating our kids, supporting industries like 
nanotechnology, which is really great in my district, 
partnerships with the private and the public sector with 
Northwestern University and spin-off companies and renewable 
energy which have the potential to create millions of good 
jobs.
    So now I see that our ranking member of the full committee 
has arrived and I would like to yield the rest of my time to 
him.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much. I appreciate your taking 
the opportunity to talk about the hearing for today.
    Job growth must be our number one priority but I am 
concerned that the policies being pursued by the House would 
have the opposite effect. They would eliminate jobs, not create 
them.
    A recent analysis from Goldman Sachs concluded Republican 
spending cuts in the C.R. could significantly reduce U.S. 
economic growth, thereby decreasing job growth and further 
slowing down the recovery. An analysis from Moody's Analytics 
concluded that the Republican spending cuts could result in up 
to 700,000 fewer jobs by the end of the fiscal year. Slower 
growth and fewer jobs are clearly steps in the wrong direction 
for this country.
    American families are facing real economic pain. For 
millions, their jobs are gone, their savings depleted, their 
home values down, and their belief in the promise of the 
American dream diminished. We have a responsibility to these 
Americans to not only keep moving along a path of job growth, 
but to act reasonably and responsibly to accelerate the growth 
of recent months.
    So how do we get there? The President has called for the 
United States to out-educate, out-innovate and out-build our 
competitors, and I believe we are up to that challenge. In 
order to meet that challenge we need targeted public and 
private investments in key sectors that will grow our economy 
and create jobs.
    One key sector is education. The United States is near the 
bottom of industrialized nations in math and science literacy. 
We must invest in science, technology, engineering and math to 
compete with the rest of the world.
    Another key sector is research and development. In order to 
retain America's competitive edge, we must always be planning 
for the future. Basic research must be advanced in all areas 
including manufacturing, biomedical, clean energy, cyber 
security and information technologies.
    And finally, we must invest in our infrastructure, both our 
physical infrastructure like crumbling roads and bridges and 
our virtual infrastructure encompassing computing, networking 
and wireless spectrum.
    I agree we need to put our Nation's fiscal house in order 
but we should not choke our economic recovery. That would be 
profoundly counterproductive. We are facing revenue shortfalls 
because we have fewer people working and contributing to the 
federal treasury. Boosting job growth and boosting consumer 
spending leads to increased federal revenues as more people 
return to the tax rolls. All of this leads us to the long-term 
goal that we all share of protecting our fiscal future. We must 
spend responsibly, but most importantly, in the short and mid 
term, we must focus on growing our economy and creating jobs. 
We must focus on investing in education, innovation and modern 
infrastructure to ensure we stay ahead of our competitors 
around the world.
    Madam Chairman, I am glad we are having a hearing on job 
growth and I look forward to working in a bipartisan way to 
solve our pressing fiscal issues. I yield back the balance of 
my time.
    Mrs. Bono Mack. I thank the gentleman.
    We are going to have two panels before us today. Each of 
the witnesses has prepared an opening statement. As is 
customary, they will be placed in the record. Each of you will 
have 5 minutes to summarize that statement in your remarks.
    On our first panel today, we are very pleased to have the 
Hon. John Fernandez, Assistant Secretary of Commerce, Economic 
Development Administration. Thank you for being here today, Mr. 
Secretary, and you have 5 minutes.

 STATEMENT OF JOHN FERNANDEZ, ASSISTANT SECRETARY OF COMMERCE, 
  ECONOMIC DEVELOPMENT ADMINISTRATION, DEPARTMENT OF COMMERCE

    Mr. Fernandez. Thank you very much, Chairman Bono Mack and 
Ranking Member Butterfield and members of the subcommittee. I 
appreciate the opportunity to be here today on behalf of the 
Economic Development Administration. I applaud the leadership 
for the subject of this hearing. I think it is near and dear to 
all of us and it is a critically important time in our 
country's history.
    A few weeks ago, President Obama released his proposed 
budget for fiscal year 2012. It represents a fiscally 
responsible plan to rebuild our economy and win the future by 
out-innovating, out-educating, out-building our global 
competitors and creating the jobs and industries of tomorrow.
    The budget focuses our federal resources in critical areas 
of education, innovation, clean energy and infrastructure. It 
proposes to reform how Washington does business, putting more 
federal funding up for competition, cutting waste and 
reorganizing government so it can better serve the American 
people.
    You know, all of us know that economic development is not 
easy, even in better times, and we certainly know that the 
reality is that economic development has changed significantly 
in the 45 years since EDA was created. We can no longer count 
on ``build it and they will come'' economy development 
strategies of the 20th century. These strategies don't work on 
today's global economy.
    The Department of Commerce and EDA are providing leadership 
to the Administration's efforts to build a more innovation-
driven, more entrepreneurial economy. In particular, to spur 
innovation, we must cultivate competitive, high-performing 
regional economies as the foundation for national growth. EDA's 
Jobs and Innovation Partnership puts a premium on regional 
innovation cluster strategies as a platform for linking 
multiple initiatives across the Administration and the Nation's 
metropolitan areas and rural communities. The Jobs and 
Innovation Partnership is designed to cultivate public-private 
partnerships and support strategies that capitalize on regional 
assets to create jobs and encourage business expansion.
    Importantly, the investments we make support bottom-up 
strategies developed by local and regional leaders. This 
orientation that the best ideas bubble up from regional and 
small business leaders is a critical element in our ship.
    Here are a few examples of the kinds of investments we have 
recently made. EDA invested a little over $2 million in 
JumpStart, which is a venture development organization in 
Cleveland, Ohio, to promote innovation and small business 
development in six Midwest cities. EDA provided a small but 
catalytic grant to the city of Nashwauk, Minnesota, to build 
critical infrastructure that was needed to secure the 
development of the new Essar Steel plant, which was a $1.6 
billion project which was projected to create about 2,800 jobs. 
EDA helped fund the Water and Energy Technology Incubator in 
Central Valley, Fresno County, to nurture and grow water and 
energy technology businesses. Since its opening, more than 15 
companies have been formed and leveraged over $17 million in 
private capital, creating jobs for central Californians.
    I wanted to also make a note about American COMPETES, which 
was reauthorized by Congress last year. I really appreciate the 
strong bipartisan support for that piece of legislation. It 
provides the tools that EDA needs to encourage and support more 
of this kind of regional innovation strategy.
    We work hand and hand with many of other federal agencies 
to promote and advance such regional strategies. In 2010, the 
White House Interagency Task Force for the Advancement of 
Regional Innovation Clusters launched the first-ever joint 
federal funding opportunity to involve six other federal 
agencies. Included in this partnership are the Department of 
Energy, the National Institute of Standards and Technology, the 
Department of Labor, Department of Education, the SBA and the 
National Science Foundation. We are currently working through 
this interagency process to identify even additional 
opportunities to accelerate regional innovation clusters
    There should be no doubt in today's global economy that 
regions matter. Our most serious competitors don't come from 
the town just down the road or across the State line. They come 
from around the world, from India, Germany, Singapore, China 
and too many other countries to name.
    So Chairman Bono Mack and members of the subcommittee, I 
certainly do appreciate the opportunity to be here today to 
talk about our efforts at our agency to support competitiveness 
of America's regions as we continue to provide the kinds of 
opportunities for the people throughout the country, and I look 
forward to answering your questions today and working closely 
with Congress to help strengthen our communities and small 
businesses. Thank you.
    [The prepared statement of Mr. Fernandez follows:]



    
    Mrs. Bono Mack. I thank the Secretary, and the chair will 
recognize herself for the first 5-minute round of questions.
    So Secretary Fernandez, thank you very much for being here 
today. It is a pleasure to meet you. Some of my questions are 
going to be tough and to the point. My goal isn't to assign 
blame for our Nation's economic problems; my goal is to find 
solutions. As the ranking member said, all of us here want the 
same thing: a very strong and vibrant, prosperous America.
    But here is my first question. In this week's Bloomberg 
Business Week, one of our Nation's smartest minds, Mary Meeker, 
looks at the United States as a business and asked, ``Would you 
invest in a company that lost $2 trillion last year and has a 
net worth of a negative $44 trillion?'' So Secretary Fernandez, 
how would the Administration answer that question and how do we 
make ``Made in America'' matter again?
    Mr. Fernandez. Well, I think the Administration would 
absolutely respond with a resounding ``yes.'' I mean, there are 
clearly challenges that we have had to face following the 
financial meltdown and some of the transformational things that 
are happening in the global economy. But I think America is 
incredibly well positioned to build on the leadership we have 
had in innovation. As Chairman Barton mentioned, we have some 
of the most productive workers in the world. We have some of 
the most innovative companies in the world.
    But there is certainly, and I think we would all agree, 
that there are areas where we need to seriously tackle some of 
these challenges. The President has been clear that he supports 
reforming our corporate tax structure so that we can be more 
competitive globally. We are serious about looking at the kinds 
of regulatory reform that can help spur innovation.
    Mrs. Bono Mack. On that note, let me jump in. Five minutes 
is so quick, Mr. Secretary.
    Small, successful businesses in America all have good 
business plans and usually they are flexible. They are flexible 
enough to evolve over time as market conditions change. What 
would you say are the essential elements of the 
Administration's business plan when it is on the--I am asking 
the same question that you are answering but if you could 
continue, I guess, in that vein.
    Mr. Fernandez. What I could say, Madam Chairman, is that I 
think, candidly, your opening comments laid out a large range 
of issues that are critically important that I think there are 
tremendous opportunities for bipartisan support. The tax 
structure has to be competitive. We have to invest in 
innovation. We have to support education, 21st century 
infrastructure. I think there are many places where the 
Congress and the Administration can work together because, 
again, the whole notion of this hearing about making in America 
is essentially important to all of us and we embrace that 
objective and I think we can work together on it.
    Mrs. Bono Mack. Well, we all agree and we are all saying we 
want to together but something clearly isn't working. 
Unemployment has been stuck at more than 9 percent for a record 
20 straight months.
    I was a small-business owner. I owned a small restaurant, 
and I knew on a firsthand basis that for me to have succeeded 
as a restaurateur, the government needed to get out of the way, 
and I think that, as the vice chairman, that is what we are all 
looking for is government to get out of the way and let the 
private sector lead the way. Can you speak to that a little 
bit? Are you hearing the same thing that we are hearing, that 
the vice chair talked about, that the government needs to get 
out of the way and actually help by getting out of the way, by 
removing the impediments to growth?
    Mr. Fernandez. What I hear and what my experience has been 
is that certainly the private sector is going to be the driver 
and source of innovation and job creation. There is no dispute 
about that. But the government has a critical role to play as 
well.
    Mrs. Bono Mack. But right now there are rules and 
regulations that are imposed that cost Americans more than 
$1.75 trillion a year. So how does that reconcile? Those two 
don't reconcile at all. To put it in some perspective, the 
federal budget deficit is projected to be $1.4 trillion. So if 
we are going to create jobs, how do we provide a more fair and 
sensible predictable regulatory regime? What we are saying and 
what we are doing are not reconciling at all.
    Mr. Fernandez. Well, as the President has said, and he said 
it in the State of the Union, he said it in since then, is that 
we absolutely do support regulatory review. We want to weed out 
the kind of regulations that are outdated and aren't productive 
or necessary, but finding and maintaining those that actually 
do serve a valid public good.
    Mrs. Bono Mack. Can you name a quick two or three that you 
have already found?
    Mr. Fernandez. Well, I can't. For me, no. We are 
currently--at the EDA, in fact, we have published an RFI and we 
are reviewing all of our regulations as well. We are a small 
agency. But we think that are probably rules within our own 
system that are obstacles and slow down the process, 
particularly as we want to build public-private partnerships.
    Mrs. Bono Mack. Well, I look forward to working with you on 
that in the future.
    I would like to yield back my time and recognize the 
ranking member for 5 minutes.
    Mr. Butterfield. Thank you very much, Madam Chairman.
    Let me spend my time, Mr. Secretary, talking about 
infrastructure. My district in North Carolina will never 
recover unless we can invest in infrastructure and invest 
significantly in infrastructure, so this is very dear to me. We 
have heard time and time again that private investment drives 
the economy, and certainly that is true. We have heard it is 
time for the Federal Government to stop spending money, and we 
all hear that when we go home and to a certain extent that is 
also true. We also hear that it is time for the Federal 
Government to just get out of the way. We heard that from the 
vice chair of the committee this morning and we hear it from 
time to time.
    While I agree that the private sector is and should remain 
the driver for economic growth and prosperity, public 
investments can indeed can help fuel private sector growth by 
lowering costs for American businesses. As the Association of 
Manufacturers suggests, investments in infrastructure can help 
manufacturers more efficiently move people, products and ideas. 
And so my question to you, sir, is, can you please explain to 
this subcommittee and to all who are interested how investments 
in modern infrastructure like roads and railroads and ports can 
improve the efficiency and competitive capacity of America's 
businesses?
    Mr. Fernandez. Well, let me just say this. I think 
generally there is no silver bullet that is going to address 
all of the economic challenges we face but you have to have a 
holistic approach. Twenty-first-century infrastructure that is 
efficient, that can move product, can move digital products as 
well as hard products, those are essential to having the kind 
of climate where companies can be successful and create jobs 
and provide opportunities. But today's infrastructure has to, 
in my judgment, certainly include some of the traditional basic 
infrastructure but it also includes a lot of innovation 
infrastructure. It means STEM education, investments in 
research and development that can be commercialized to create 
whole new industries that we haven't even thought of, and 
looking at how we create the kind of ecosystem, if you will, in 
regions where the private sector can flourish and I think 
infrastructure in a broad way is a very important part of----
    Mr. Butterfield. What about broadband infrastructure and 
the power grid?
    Mr. Fernandez. Absolutely. Sure, I mean, smart grid, we 
have made significant investments as part of the Recovery Act 
to enable the development of smart grid to more effectively 
distribute energy but also enable whole new lines of products 
to be developed around energy-efficient manufacturing, new 
appliances, etc. So I think there is tremendous opportunities 
in smart grid, in broadband, wireless technology. Those are all 
the essential infrastructures that are really growing an 
effective global economy.
    Mr. Butterfield. And having said all of that, can the 
private sector be economically profitable without any public 
assistance whatsoever, in your opinion?
    Mr. Fernandez. Well, as I said before, I think there is a 
strong critical role for the private sector and there is a 
strong critical role for the public sector, and I think my 
experience as a mayor and working at the local level is that 
our economy works best when we have those kind of strong 
public-private partnerships. There is a role for both sectors 
to play that are critically important, and we do best when we 
work together.
    Mr. Butterfield. On the subject of manufacturing, and I 
have a minute and a half left, although the dominance of the 
American manufacturing sector has been chipped away for some 
time, our country remains the world's largest manufacturing 
economy. According to the manufacturers again, we produce 21 
percent of global manufactured products. Japan and China follow 
at 13 and 12 percent. Our continued dominance shows that 
America is still a place where we can do and make things, and 
our financial security along with our long-term national 
security demand that we continue to do so. For years, even 
before the recession, we heard about the offshoring and loss of 
jobs from the United States, but as we continue to recover from 
the recession, it is the manufacturing sector that has proven 
to be among the bright spots in a slow recovery.
    The manufacturing sector has been growing for the last 19 
months, make no mistake about it, and this past January 
manufacturing activity turned in its best performance since May 
of 2004. Even more surprising, companies like GE and Ford, 
among others, have announced that they are moving jobs out of 
China, Japan and other countries and back to our country. To 
use the words that the chairman used in her opening statement, 
they are beginning to in-source. These aren't just jobs but the 
sort of good-paying jobs that we need more of right now and in 
the long term. Do you know what is driving the growth in the 
manufacturing sector in just a few seconds? Do you know what is 
driving the growth?
    Mr. Fernandez. I think what is driving it is the ingenuity 
and productivity of the leadership in our companies and the 
workers that help build our companies.
    Mr. Butterfield. Thank you.
    Mrs. Bono Mack. I thank the gentleman.
    The chair recognizes the vice chair, Ms. Blackburn, for 5 
minutes.
    Mrs. Blackburn. Thank you, Mr. Secretary, and a question 
for you, because I have got some counties that we have some 
unemployment problems. The countries where you have given 
grants, is there any statistically significant difference in 
the unemployment rate between the counties that you have had 
grants in the last 5 years and those that you have not?
    Mr. Fernandez. We have not engaged in any kind of detailed 
analysis that could answer that question.
    Mrs. Blackburn. So you don't know if what you are doing is 
working or not?
    Mr. Fernandez. I believe your question is one that we can't 
answer with the studies we have done but I can tell you that 
the investments we make have very direct leverage. Our grants 
are tied to specific partnerships where there is immediate 
private sector leverage, there is public matched dollars, and 
they have certainly made an impact on the communities where we 
make those investments, yes.
    Mrs. Blackburn. OK. So but you have not had a serious study 
to look at this to make a determination if the taxpayer is 
getting their dollar's worth?
    Mr. Fernandez. We are confident the taxpayers are getting 
their money's worth. We report out findings on a 3-, 6-, 9-year 
basis following our investments. There have been two 
independent studies that were done to look at the accuracy of 
the reporting out, one by Rutgers in 1997, another by Grant 
Thornton in 2008, and they validated the measures that were 
used by the EDA and by our grantees that report out the 
economic impact of the grants we made.
    Mrs. Blackburn. OK. Well, I have got--let us take this as a 
for instance because I think it concerns me when you all don't 
do the kind of evaluation of what you are getting for this 
money, and as I said in my opening statement, you can look at 
what is happening with unemployment and see something is not 
working right, and that is what frustrates the American people, 
and as I mentioned, I have been working with my chambers of 
commerce and local communities and we are doing job creation 
listening sessions, and there is a laundry list of things that 
they think are being done inappropriately.
    Let me talk about two of my counties, Wayne and Perry 
counties. Unemployment has hovered around 20 percent. If you 
look at your EDA eligibility requirements, then you could say 
that much of the country is going to qualify for EDA 
assistance. So tell me what processes are in place to ensure 
that projects are created in the most severely economically 
depressed counties. How are you all making that evaluation?
    Mr. Fernandez. Well, as you know, the way our grants are 
made are through a competitive grant system and so as a 
baseline there has to be some eligibility criteria that are 
met. But then our decisions are based on the strength of the 
applicants and the proposals that they make, and as we evaluate 
those applications, we look at the extent of the----
    Mrs. Blackburn. Have you ever been to Tennessee, to Wayne 
or Perry counties?
    Mr. Fernandez. I am not familiar with the counties. I have 
certainly been to Tennessee, yes.
    Mrs. Blackburn. What part?
    Mr. Fernandez. To Memphis, to Nashville.
    Mrs. Blackburn. OK. All right. Your agency has photos 
posted on your Web site of international travel to Lyon, to 
Brussels in November and December of 2010. Your Web site 
indicates that EDA officials are going to go to Hanover, 
Germany, April 3 through 8, 2011. So please submit to this 
committee in writing all past international travel over the 
past 2 years, the purpose of that international travel 
including the itineraries and the cost of that international 
travel and name some positions of the federal status of the 
staff attending all international trips. I would also like to 
know if attendees traveled in coach or business class and 
specific flights. Additionally, please detail with similar 
information the Hanover, Germany, trip and all planned future 
international trips, and I would love for you to explain to me 
the purpose of EDA's participation in these international 
trips.
    Mr. Fernandez. I would be happy to.
    Mrs. Blackburn. If the EDA is promoting U.S. 
competitiveness in export abroad, I would say maybe that is the 
role of the Foreign Commercial Service, and during the State of 
the Union address, the President singled out export.gov as 
government waste and duplication, so do you believe one more 
agency's presence in promoting U.S. exports abroad is 
necessary? And if so, do you believe the FCS is unable to do 
its job effectively?
    Mr. Butterfield. Reserving the right to object.
    Mr. Fernandez. Well, I would be happy to provide all the 
information that you requested.
    Mrs. Blackburn. Thank you. I look forward to it.
    I yield back.
    Mr. Butterfield. May I be heard for a point of order, Madam 
Chairman?
    Mrs. Bono Mack. The gentleman may be heard.
    Mr. Butterfield. I have asked the staff if it is 
appropriate for a member of the subcommittee to posit this type 
of question to a witness, and I am told that it is an 
appropriate ask, but I would ask the gentlelady if she would be 
so kind as to make the same request in writing so there would 
be some clarity about the request?
    Mrs. Blackburn. I will be happy to submit the request in 
writing. I think that as we look at the purpose of the EDA, and 
I appreciate the ranking member's question, that this is 
information that we want to know. We are looking at why we are 
not getting jobs creation in this country. We are hearing from 
our listening sessions that there is a problem and a disconnect 
between the Federal Government and local communities, and I 
would suggest to the gentleman and to the Secretary that we may 
be looking at one of the disconnects and a place we can go over 
some redundancy.
    Yield back.
    Mr. Rush. Will the gentleman yield, please? Will the 
ranking member yield?
    Mr. Butterfield. I believe it may still be my time. If it 
is on the point of order, I yield to the gentleman.
    Mr. Rush. Madam Chairman and members of the committee, it 
seems to me that this line of questioning should appropriately 
be addressed in the Subcommittee on Oversight. I think that the 
energy and time and efforts of this committee should be more 
focused on looking at policy issues rather than looking at 
travel itineraries for members of the Administration, and I 
strongly concur with the position with the ranking member that 
I think it is just a waste of our time and a waste of the 
Secretary's time to have his staff dedicated to these purposes. 
If the author of the request, if she really wanted to be--I am 
not sure if she is a member of the Oversight Subcommittee but 
maybe that is the appropriate place where----
    Mrs. Bono Mack. If the gentleman will yield?
    Mr. Rush [continuing]. This should actually take place.
    Mr. Butterfield. Yes, I will yield to the chairman.
    Mrs. Bono Mack. I appreciate the ranking member yielding to 
me, and I would just like to say that this committee does have 
oversight, and I believe the questions are relevant and she has 
offered to present them to you in writing, which is customary, 
and I would like to know if the ranking member is comfortable 
with that.
    Mr. Butterfield. I will continue to reserve my right to 
object until we can see the written document, and then I will 
probably withdraw it. Thank you. I yield back.
    Mrs. Bono Mack. All right. The chair would like to 
recognize Ms. Schakowsky for 5 minutes.
    Ms. Schakowsky. Thank you, Madam Chairman.
    Our chairwoman has said that what the businesses that she 
is familiar with and business in general just want government 
to get out of the way. Secretary, I wanted to ask you if you 
have ever seen a business lobbyist who was here not to get rid 
of government or perhaps to get government to weigh in on the 
side of business. Have you ever seen that?
    Mr. Fernandez. I am sorry. The question is, have I seen----
    Ms. Schakowsky. Yes, the assertion was that all that 
business wants is for government to get out of the way. I am 
wondering if you, like me, have ever been approached by 
businesses who actually want something from government, would 
like something done for business by government. Have you ever 
seen that?
    Mr. Fernandez. Sure.
    Ms. Schakowsky. Let us just be clear and honest about that, 
that it works both ways, that there are things that the 
business community through its legion of lobbyists are all on 
the Hill all the time for things not to get government out of 
the way but actually to get government involved. I am not 
objecting to that. I am simply making that point.
    And there has also been some suggestions that the--well, I 
am wondering if you could describe the way in which the 
President's budget, which does cut $41 billion from spending, 
how it actually would have more success in job creation in your 
view or not than what the Majority has suggested in terms of 
its Continuing Resolution.
    Mr. Fernandez. Thank you. The President's budget strikes 
the right balance, which is, we have got to get our fiscal 
house in order. He has made a proposal for a 5-year freeze in 
non-defense discretionary spending, which will save about $400 
billion, and in the meantime, though, we have to prioritize the 
investments that are going to make us strong and create an 
economy that can compete and compete effectively 
internationally. And the idea that investments in education and 
STEM and R&D and 21st century infrastructure, I think those are 
things that frankly I hear from the private sector as well as 
are essentially important to provide the right kind of 
environment where their companies can be successful. So I think 
the notion that everyone, I think, can find agreement on is 
that we have to make these kinds of foundational investments 
that create the conditions where you can have competitive 
industries that can innovate and grow and provide jobs for our 
people, and you have to have the right balance so that you are 
making tough choices on the budget to get our fiscal house in 
order, and that is the President's proposal and obviously we 
think it is sound one to move the country forward.
    Ms. Schakowsky. Thank you. Let me just make one other 
comment about rules and regulations, that going back to what 
the President had said in his State of the Union address and 
that you verified, that there is a regulatory review. Let us be 
clear. We should all be clear that the American people do want 
some rules of the road and they don't want to have their 
children suffer from asthma from bad air and from bad water. 
They want safe food. In fact, 81 percent of Americans say they 
want safe food. I would imagine that there would be businesses 
in the States that would want to make sure that there is some 
regulatory framework to protect them from perhaps unsafe items 
that are coming from another country. Can you just speak to 
that in the minute that is remaining?
    Mr. Fernandez. Well, I am not sure what I can add to the 
statement other than that again I think the President's 
proposal is to have a serious, honest review of the regulations 
that are currently in place, weed out those that are 
unnecessary and overly burdensome that really don't maximize 
the public good, and I think we can strike a balance on the 
kinds of regulations that actually serve the public well but do 
protect it while we enable the businesses to grow and the 
economy to flourish.
    Ms. Schakowsky. Thank you. I yield back.
    Mrs. Bono Mack. The gentlelady yields back. The chair 
recognizes the gentleman from Mississippi, Mr. Harper, for 5 
minutes.
    Mr. Harper. Thank you, Madam Chair.
    And Mr. Fernandez, thank you for being here. I know you 
have looked forward to this day for a long time.
    Mr. Fernandez. Well, at least since Friday when I was asked 
to do this.
    Mr. Harper. Yes. I understand. And look, I appreciate the 
fact that you have a responsibility to present and represent 
the Administration's views, but when we sit here and talk about 
the President's budget, you say it strikes the right balance 
and you mention the 5-year freeze, but that is at current 
levels, the 5-year freeze, correct?
    Mr. Fernandez. Correct.
    Mr. Harper. And so after we have spent the last 2 years 
running those numbers up, would it not make more sense to you 
that perhaps we are better off if we roll back, scale back that 
and then freeze at a lower level? Would that not have a better 
impact on job creation in this country?
    Mr. Fernandez. I think reasonable people are going to have 
different opinions about that.
    Mr. Harper. And I understand. I am putting you in a little 
bit of a spit here, and I understand the team concept on how 
you have to do that. I understand that. But when you talk about 
that, and I know you didn't mention but the President and the 
Administration has said that under his plan I believe that by 
the year 2017 that it would cut the annual deficit in half, I 
think it my understanding. But when we hear those things and 
perhaps a 30-second sound bite, when we look at those real 
numbers, that half is still more than 50 percent of former 
President Bush's highest year of the deficit, and so what we 
want to do is, we just want the truth. Whatever that is, let us 
deal with it and try to work.
    There is no doubt we have a common goal here, which is to 
create jobs and improve the economy. When I look at my State in 
Mississippi, I haven't found a business yet or an industry yet 
that says we are underregulated. Have you identified any 
business that you have worked with that says hey, we need more 
regulations? Have you found one in your journeys so far?
    Mr. Fernandez. Let me just say that I think what I hear the 
most, honestly, is that the people I work with are looking for 
the right balance. They want a partnership that is effective 
and they respect the roles the public and the private sector 
can play but I think people genuinely want to work together to 
move the economy forward.
    Mr. Harper. If you were looking across the board as you 
look at the idea of job creation, is there any particular 
agency that you hear the most complaints about from the 
businesses that you talk to, not judging those complaints but 
is there any one that you hear more of out of than another?
    Mr. Fernandez. There is none that I hear more about than 
any of the others.
    Mr. Harper. You talked about the competitive grant 
situation, and we just got a little bit of time left, but when 
you are looking at that, do you have a ratio or an amount that 
you look at as far as the management costs or the 
administration costs versus, say, a percentage of what that is 
as to what is done by grant, the amount of the grant? Is there 
some rule of thumb that you use or anything of that nature as 
to how you keep those in balance or in check?
    Mr. Fernandez. Just to be clear, the administrative costs 
to the agency or----
    Mr. Harper. Yes.
    Mr. Fernandez [continuing]. To the grantee? We don't look 
at the agency cost directly because the truth is, it is a 
pretty modest budget. So the administrative cost to the EDA of 
any particular grant versus another is going to be really de 
minimis. What we look at are, is there a strong partnership, is 
there a good strategy in place, are they building on the assets 
that are going to enable sustainable economic growth, is there 
a commitment of leadership from the private sector as well as 
the public sector in that community around that strategy.
    And I should note that, when it comes to EDA, and this was 
part of the question earlier, it is not free money. A very 
important part of the way our agency works is that people have 
to put skin in the game so by statute we have a minimum match 
requirement of 50 percent, and in many cases, since it is a 
competitive system, folks come in with more, and it is that 
kind of leverage bottom-up strategy that I think actually does 
produce very real results.
    Mr. Harper. And when you are looking at that competitive 
grant situation, how do you balance or eliminate or disregard, 
say, political interests that might be a part of who the 
grantee or the recipient might be?
    Mr. Fernandez. Well, we do it in a couple of ways. One is 
that it is a transparent competitive process. Secondly, the 
money that is appropriated to the EDA gets disbursed out and 
allocated across our six regional offices. There are no 
political appointees in any of those six offices and they make 
the decisions about where the grant dollars go, and I think the 
bipartisan support that has been strong over the years for 
EDA----
    Mr. Harper. Thank you, Mr. Fernandez. I am afraid we are 
out of time, but thank you very much.
    Yield back.
    Mrs. Bono Mack. I thank the gentleman and recognize the 
gentleman from Illinois for 5 minutes, Mr. Rush.
    Mr. Rush. Thank you, Madam Chairman.
    There is a global demand for greener, sustainable economies 
which include a global demand for clean energy technologies. 
The United States used to dominate the field for the invention 
and manufacturing of clean energy technologies. Today, our 
Nation lags behind other nations for clean energy investments, 
innovation and manufacturing. China spends roughly $12 million 
monthly, that is per month, on new energy technologies and 
export expansions. In 2006, U.S. public investment in renewable 
energy was less than one-fourth of that for the entire year. A 
venture capitalist who was an early investor in Google sized up 
America's investments in its energy future in the following 
way: ``America spends more on potato chips than we do on new 
energy research and development.'' I mean, we all like potato 
chips but the price of gas has shot up 20-plus cents in the 
last week so we might be wise to spend more money on finding an 
alternative for a such a volatile energy source than we do on 
our consumption of potato chips.
    If we want to stay globally competitive, we want to secure 
our energy future, we must invest in research and development 
of clean energy technologies, and President Obama acknowledged 
this fact, stating, ``We can make the investments that will 
allow us to become the world's leading exporter of renewable 
energy. We can let the jobs of tomorrow be created abroad by 
some other nation or we can create those jobs right here in 
America and lay the foundation for our lasting prosperity, 
prosperity for our children and for our grandchildren.''
    I have three questions. What is the Department of Commerce 
doing to help U.S. companies become leaders in clean energy 
technology? What is the Commerce Department doing to ensure 
that the United States is at the forefront of energy and 
resource efficiency? And lastly, do we have the highly skilled 
workforce needed to fill these technological and green jobs 
right now?
    Mr. Fernandez. Well, the agenda to drive clean energy and 
the sustainable development, the green economy, if you will, is 
broad and covers a lot of departments throughout the Federal 
Government. Commerce is certainly engaged in it. You know, the 
work that is happening in the United States Patent and Trade 
Office around protecting IP is an essential part of the 
innovations in the green economy. Our export agencies are 
certainly engaged. EDA, we work with communities, particularly 
on building the partnerships between the workforce component to 
have the kind of skills and the capacity to work in those 
industries, and we certainly are involved in some of the 
investment decisions through our competitive grant systems that 
have enabled communities either to build as I mentioned in the 
opening testimony the incubators around clean technology, other 
investments in infrastructure for some of the large 
manufacturing plants that are part of the clean technology 
economy. So there is a wide range of activities that Commerce 
is involved in, but overall, I mean, clearly President Obama 
and this Administration have made clean technology, clean 
manufacturing a very important centerpiece of the recovery 
programs as well as ongoing economic development priorities.
    The Recovery Act had significant investments that have paid 
off, frankly, in terms of the tax credits that encourage 
manufacturing in the green energy-efficient areas. So there is 
clearly a big commitment and it is a big priority for this 
Administration.
    Mr. Rush. The President has called for the doubling of 
exports in the next 5 years. Can you tell us what you believe 
are the manufacturing sectors with the highest potential for 
increasing exports and what can we do to improve growth in 
these sectors and to help them remain globally competitive?
    Mr. Fernandez. Well, clearly exports are an essential part 
of the manufacturing economy and the U.S. manufacturing sector 
is a major exporter. It is one of the largest export components 
of the American economy. I couldn't tell you the specific 
industries but I would be happy to get that information from 
our colleagues at ITA or somewhere else within the department.
    Mr. Rush. Thank you. I yield back the balance of my time.
    Mrs. Bono Mack. I thank the gentleman.
    The chair recognizes Mr. Guthrie of Kentucky for 5 minutes.
    Mr. Guthrie. Thank you, Madam Chairwoman, and thank you, 
Mr. Secretary, for being here. I appreciate it, and I am glad 
that you are focused on job creation as well.
    One of the struggles that I have seen in my time in 
Congress is just the astounding array of regulations that are 
coming, that are prepared, that are being put forth, and 
businesspeople are concerned. Yesterday, the Kentucky Farm 
Bureau, not the insurance agent but the farmers from my area 
were in town and they talked about the Farm Bill in passing. 
Their biggest concern was what EPA was going to do to the farm, 
and just concern from making milk a biohazard. I mean, those 
are different things that are coming forward that we see, and 
it is the same in manufacturing.
    I am from Kentucky, a manufacturing State. Ninety-three 
percent of our energy is from coal. Coal makes it cheaper. We 
have a vast if you go and down the Ohio River just across from 
where you guys are, where you are from, not too far where you 
from, you see manufacturing plants, and we are really concerned 
and we are concerned about the job loss so my question is, is 
the Commerce Department which is the voice of business working 
with these agencies to at least say I know you have got a plan, 
I know you are going in this direction but this is what is 
going to do to American business and American manufacturing? Is 
there any interagency dialog about what they are doing?
    Mr. Fernandez. Well, there is certainly a significant 
amount of interagency dialog and the Commerce Department among 
others has opportunities to weigh in on proposals that are 
coming through the Administration.
    Mr. Guthrie. And somebody said it, and I will say it tongue 
in cheek because they said it but it has some truth to it. They 
said just like we have the Trade Adjustment Act, maybe we 
should have the Regulation Adjustment Act for dislocated 
workers for what the regulatory environment is going to be 
doing, and I mean, that is a real concern out there. I know you 
know it because you probably hear it from people that are 
there. But what about the energy prices that we are seeing? I 
mean, I know we have an offshore drilling ban that was lifted 
but the permitting process is going forward. It is difficult to 
get a permit in Appalachia today. I know it is not your area or 
group, but is there discussion in the Administration about what 
this is actually going to be doing to our economy, maybe we are 
seeing some recovery if we see it turn backwards because of 
high energy prices? I know there is some issues with the Middle 
East and oil prices. I understand that. But also I think energy 
prices were rising prior to what we have seen over the last 
month in the Middle East. If you could just talk about what is 
happening here, I would appreciate that.
    Mr. Fernandez. Well, you are right. That is usually a 
subject matter that I am not as engaged in as others might be 
within the Administration, so I would be happy to follow up 
with you with some responses from of my colleagues.
    I can say that having sound, affordable clean energy is 
important to our economy and that is certainly the kind of 
investments that the Administration wants to make. But again, I 
come back to my opening point about how the President and this 
Administration are genuinely committed to looking at our 
current regulatory structure, weeding out unnecessary 
regulations that do get in the way and don't necessary serve 
the purpose they might have when they were first promulgated 
and coming up with a reasonable balanced structure that can 
enable innovation to survive and thrive and grow and protect 
public interest at the same time.
    Mr. Guthrie. Thank you, Mr. Secretary.
    I yield back.
    Mrs. Bono Mack. The gentleman yields back.
    The chair recognizes Mr. Pompeo from Kansas for 5 minutes.
    Mr. Pompeo. Thank you, Madam Chairman, and thank you, Mr. 
Fernandez, for coming out today. We had a chance to speak just 
briefly before this hearing commenced and I have spent until 8 
weeks ago my life in the manufacturing world, and I was looking 
at your prepared testimony in preparation for today. I have to 
share with you, I had never heard of EDA until that moment in 
time. I would guess that when I went back to Kansas and talked 
to manufacturers there, they likely would not have heard of it 
either, and if I asked them what would be most important to 
them growing their business, they would not talk to me about 
rolling the roulette wheel and catching a grant from EDA but 
rather would talk to me about regulations and taxes and that 
kind of thing. So I thought I would share that with you before 
I sort of dug into a couple of specific questions.
    So in here you talk about a $1.4 million grant to Nashwauk, 
Minnesota, that leveraged a $1.6 billion plant. Do I have that 
right?
    Mr. Fernandez. We were part of that plan, yes.
    Mr. Pompeo. Is it your testimony that absent your $1.4 
million grant, that that $1.6 billion investment would not have 
been made?
    Mr. Fernandez. No. What I would say is that the grant we 
made was critically important to----
    Mr. Pompeo. When you say ``critical,'' that is the key 
word. So if you had not made your grant, would that project 
have proceeded?
    Mr. Fernandez. It would have made it more challenging.
    Mr. Pompeo. One point four million dollars as a part of a--
I just--I am skeptical that that was the $1.4 million--you have 
used the words ``critical'' or ``catalytic'' before. I am 
skeptical that a federal grant of $1.4 million is catalytic to 
a $1.6 billion investment.
    Mr. Fernandez. No, and we try and be careful about that as 
well. But if I can, let me just----
    Mr. Pompeo. And they are critical. Those----
    Mr. Fernandez. Yes, absolutely.
    Mr. Pompeo [continuing]. Are the justification for your 
agency's existence.
    Mr. Fernandez. Let me answer the question, though, maybe 
give you a little bit more background on that specific project. 
You know, the plant is not located in that particular town. 
That town's entire budget is barely over a million dollars a 
year but the water lines and the infrastructure that needed to 
connect up to this new plant went through that little town and 
they needed to come up with the resources, and it was essential 
and it was a tremendous opportunity for them to be able to get 
an EDA grant to fund that. They would have had a very difficult 
time connecting this infrastructure to the plant because it was 
their responsibility.
    Mrs. Bono Mack. Excuse me, Mr. Secretary. The time is 
expired.
    The chair recognizes Mr. Towns for 5 minutes.
    Mr. Towns. Thank you very much. I want to thank you for 
having this hearing as well.
    We all agree that we need to get our fiscal house in order. 
We agree. But there are major differences of degree about how 
to accomplish these goals. Some argue that the Federal 
Government should simply stop spending money. This notion makes 
no sense in the short term during which the recovery hasn't 
fully taken hold nor in the long term if we expect to raise 
enough revenue to pay down our debts. Completely halting our 
investments in R&D, education and infrastructure would be 
devastating in the short and long term. Moreover, this 
suggested approach by government ignores how much of the rest 
of the world operates.
    As much we might like, we aren't living in a world defined 
by completely free and open competition. For example, at a 
hearing in the last Congress on growing U.S. trade and green 
technology, we learned that many countries place tariff and 
non-tariff trade barriers on green goods. Denmark, for one, has 
essentially mandated the use of Danish manufactured wind 
turbines. In addition, other countries are investing huge 
resources into new technologies. The United States now ranks 
11th among the G-20 countries for the intensity of its 
investments in clean energy and technology. My question to you: 
Can you please describe some of the other barriers to access 
that United States manufacturers face when trying to enter the 
clean energy market of other countries? What can be done to 
reduce or to eliminate those barriers?
    Mr. Fernandez. You know, let me just--it is probably going 
to get a little bit beyond my portfolio but let me just say 
that I would be happy to get more information to you on that. I 
think the biggest barriers, we are looking for fair trade 
agreements where we can enable exports from our country to have 
access to these growing markets. I think in terms of the clean 
energy, I mean, the barrier here frankly there is uncertainty 
about the market in the United States, uncertainty about having 
a comprehensive energy policy and some of those issues that 
create impediments to private sector and other financial 
institutions making big investments here, and until we resolve 
some of those issues, I think that is going to be a drag on our 
ability to invest more and become more competitive in the clean 
tech space.
    Mr. Towns. Well, what is the Commerce Department doing to 
help ensure that the United States is in the forefront of 
energy and resource efficiency? That is your pay grade.
    Mr. Fernandez. Well the Department of Commerce certainly 
under Secretary Locke's leadership has been very aggressive 
about enforcing trade agreements and going after some of the 
tariff barriers that create an uneven playing field for 
American companies. The Energy Department and others throughout 
the Administration have made significant investments in new 
innovation, in research and development, in commercialization 
around clean technology opportunities, so we are investing I 
think in a significant way to grow that part of the economy.
    Mr. Towns. Do we have people skilled enough to be able to 
handle these jobs? Do we have people qualified to do it?
    Mr. Fernandez. I believe so, yes.
    Mr. Towns. You don't think we need to do anything special 
to prepare the workforce needed for these jobs?
    Mr. Fernandez. The workforce to support the clean 
technology industry?
    Mr. Towns. Yes.
    Mr. Fernandez. I think that there is plenty of evidence 
that one of the challenges we have in our economy is there is a 
disconnect between the skills of some of the workforce and some 
of the jobs that are actually available. So yes, we need to do 
more to improve the linkage in our workforce investments, to 
build those opportunities to support these innovative new 
companies.
    Mr. Towns. Thank you very much.
    On that note, I yield back.
    Mrs. Bono Mack. The gentleman yields back.
    And before I recognize the next colleague of mine, I just 
want to point out to the newer members that we recognize for 
questioning in the order of appearance at the hearing, and that 
is protocol for the committee and it is standard, so to 
everybody in the room, if it seems that I am skipping over 
somebody, it is just the order of appearance, and looking down 
at my young colleagues on the front dais, if I ever had to be 
behind an offensive line, I would want to be behind all of you 
guys, hopefully offensive and not defensive line.
    The chair recognizes next Mr. Kinzinger of Illinois for 5 
minutes.
    Mr. Kinzinger. Thank you, Madam Chairwoman, and thank you, 
sir, for coming out. You are doing a great job. Maybe we will 
have you back sometime. How do you like that idea?
    Mr. Fernandez. I would welcome the opportunity.
    Mr. Kinzinger. You know, I think everybody agrees, when we 
talk about getting government out of the way of small business, 
we don't mean government disappears completely. We understand 
that there is a strategic partnership in some ways that needs 
to occur. I think where the concern is, from our part, is we 
have just seen a major overstep of that, to go from almost a 
partnership to--what is the word--a big brother, father role 
that the government plays. And I think that frankly is negative 
to what we see in small business. In fact, what I have seen is 
as I have traveled around the districts is businesses large and 
small, in many cases they have the capital, they have the 
capital to invest and expand, but what they are concerned about 
is when they have to plan 10, 20, 30 years out in determining 
where to invest assets and determining where to go. They see an 
environment that just is continually shifting. It is like being 
on a waterbed. It is never stable. And so as they look out and 
say well, I can either hang on to the money I have now or I can 
make a risk, a risk in investing in the future, which frankly 
those risks and investment in the future is what drives this 
economy, they see an uncertain environment. So I think that is 
what is kind of the key is, not that there is no role for 
government but that the role for management needs to be stable 
in the long term as people try to plan things out.
    One of the other things that I hear a lot, especially, I 
come from a heavy agricultural and manufacturing district, is, 
and I have seen too is the Administration's failure to lead in 
the area of trade. You know, I am happy that we are starting to 
talk about potentially approving a trade agreement with South 
Korea. I think that is important, but we have pending trade 
agreements with Colombia and Panama, and given that 95 percent 
of the world's consumers live outside of the United States, I 
think in order to see manufacturing spark back to life, which I 
would love it to do, we do have to create a level playing field 
and that level playing field is done through setting up some of 
these trade agreements.
    So as the Administration's representative to business, have 
you discussed the regulatory environment which we have talked 
about a little bit but also a lot of that trade burdens and 
kind of the focus on getting us to where we can be competitive 
and not lose market share to China and India?
    Mr. Fernandez. Sure. You know, the Administration agrees 
with you that there are a number of pending trade agreements 
that we think would open up opportunities for American 
companies to export into a much fairer, freer system so we 
support a number of those agreements, and one of them is----
    Mr. Kinzinger. Are we going to expect to see that in the 
very near future the Administration take a leadership role then 
in getting those trade agreements through including Panama, 
Colombia and South Korea?
    Mr. Fernandez. The Congress certainly has a role in moving 
those forward as well.
    Mr. Kinzinger. OK. All right. So from what you are hearing, 
though, it is not necessarily--because I have heard them lead 
on or talk about South Korea, which I am appreciative of. I 
think that is important. But I haven't heard much lately on 
Colombia. I haven't much on Panama. And again, we are losing 
not just from the economic perspective but there is a national 
defense and strategic advantage to having these trade 
agreements, especially when we deal with enemies like, you 
know, folks to the east.
    Another question, obviously the GAO report that came out 
found 52 programs and four agencies that fund entrepreneurial 
efforts, and I have seen little evidence of your department's 
ability or I guess efforts to really work with some of these 
other agencies to find out areas of duplicative programs and 
figure out how to streamline it and make it to where we don't 
have all this overadministration. We are no longer in an age, 
unfortunately, where we can afford this kind of waste. I mean, 
we have kicked the can down the road. We need to cut our 
spending, and this is an easy area to do it. So what is your 
plan to provide corrective action to ensure that the EDA is 
leveraging its assets to promote growth and limit duplicative 
process and waste?
    Mr. Fernandez. I think it is a very fair question, and the 
work we do, as I mentioned in my opening statement, there is a 
tremendous amount of interagency collaboration going on right 
now. While there are a number of programs with the titles of 
economy development or community development, entrepreneurship, 
many of them are complementary but what is essential is that we 
get alignment and leverage so we are not duplicating and 
wasting taxpayer money. We work very closely with our partners 
in the SBA and these other agencies to come together and build 
strategies that do look for that linkage and alignment so that 
we accelerate the rate of return and don't just create 
duplication.
    Mr. Kinzinger. Thank you.
    Mrs. Bono Mack. The gentleman yields back.
    The chair recognizes Mr. McKinley of West Virginia for 5 
minutes.
    Mr. McKinley. Thank you, Madam Chairman.
    I was curious about some of the opening remarks that were 
made about Goldman Sachs. I don't necessarily think they--I 
think they were bit of a poster child about the problems on 
Wall Street but their numbers are being used now, and about 
700,000 jobs being lost if we continue this mission of being 
fiscally responsible. But then Chairman Bernanke came out and 
said that wasn't right, those were gross misrepresentations. I 
am just curious. Was Bernanke right?
    Mr. Fernandez. I didn't watch his testimony so I am not 
prepared to give you a good answer on that.
    Mr. McKinley. Just curious. I have always held the Commerce 
Department in high esteem because I think it has less of an 
agenda than some of the other departments, and I have seen in 
West Virginia the northern district that I represent, we have 
lost 24,000 manufacturing jobs in the last 10 years, and in the 
State in the last 25 years we have lost over 100,000 
manufacturing jobs to a point now where when we can try and 
characterize it, that manufacturing at one time with 150,000 
manufacturing jobs, now if you put all the remaining 
manufacturing jobs that are left in West Virginia throughout 
all three districts, it wouldn't even fill Mountaineer Stadium 
with 50,000 people. I feel threatened for our economy and I 
hoping the Commerce Department will really address that.
    I am concerned because I spoke with one of our senators he 
said the fact that we have 15 million people in America out of 
work, he said but they are getting unemployment insurance. Do 
you think senators, other people don't get it, that people want 
a job and it is our responsibility to be more definitive about 
getting those jobs rather than continuing it? On Saturday will 
be my 60th day for me to be in Congress. I have been to so many 
hearings, I have read so many reports, I have heard so much 
dialog but I haven't seen the plan that is going to put these 
people back to work. Someplace we have to do that, and it 
concerns me. Earlier this week in another meeting, another 
hearing, you were praising him unfortunately. Someone came in 
with--you were praising the regulatory bodies but this 
regulatory body had the gall to say that the greenhouse gas 
emissions regulated under the Clean Air Act is going to create 
jobs, and in West Virginia we know that it not accurate but yet 
that is what happens here in Washington is no one outside 
Washington believes that more government is going to create 
more private sector jobs. Only in the Beltway am I getting any 
sense that government is the solution.
    So I am curious, given your opening statement that you said 
it is a fiscally responsible budget to have $1.4 trillion 
deficits and we are still sitting with 9 percent unemployment, 
how can you defend, how can the Commerce that I held in high 
regard, how can you sit and defend that your policies are the 
right policy, big government is better than reducing 
expenditures? Can you share that?
    Mr. Fernandez. Sure. Again, I think that the challenges we 
have today didn't happen overnight, and it is our judgment that 
you have to have a measured response. The President's proposal 
for deficit reduction based on the freeze on discretionary non-
defense money is serious. We are not going to solve the entire 
fiscal situation in this country just looking at the 
discretionary part of non-defense part of federal budgets. 
There is a whole wide range of issues that will be addressed, I 
am sure----
    Mr. McKinley. In the budget, does he have reductions in the 
entitlement?
    Mr. Fernandez. I don't know off the top of my head. I would 
have to get back to you.
    Mr. McKinley. Could you get back to me? I would like to 
know.
    Mr. Fernandez. But I think that there is a very strong 
recognition that a lot of these tough issues are going to have 
to be addressed in a bipartisan way, and the Administration is 
committed to doing that.
    Mr. McKinley. Can you provide something giving an 
indication of what the--has the EDA, with your group, have they 
done any proactive positions or assistance in West Virginia in 
the last 2 years in the northern district?
    Mr. Fernandez. My light is lighting up----
    Mr. McKinley. Proactive, not responding but you are trying 
to help to lead the charge, and if you can't today, can you 
send that to me?
    Mr. Fernandez. Sir, we have been very active in West 
Virginia.
    Mr. McKinley. I would like it for the northern district of 
West Virginia, all that employment, 10.3 percent unemployment. 
If you could send that to me, I would like to have it.
    Mr. Fernandez. I would be glad to.
    Mr. McKinley. Thank you very much.
    Mrs. Bono Mack. Mr. Secretary, per Ms. Blackburn's 
comments, we now have her letter to you outlining her earlier 
request for the record. If you could just have your staff grab 
it from the clerk to your right before you leave and you will 
also get a copy of that electronically after the hearing, and 
we would also like to state that we have other questions for 
the record which we will submit to you, and we would appreciate 
your prompt responses in writing.
    With that, I just would like to thank you very much for 
your appearance today, and to say to you, I think we want to 
work together along with Secretary Locke in making ``Made in 
America'' work again, and I look forward to it. And as my 
colleague, Mr. Kinzinger, said, we hope you are back here often 
in the good spirit that you were here with today, so thank you.
    Mr. Fernandez. Thank you.
    Mrs. Bono Mack. And at this point we are going to take 
about a minute break while we change the panels out and then 
get started again. So thank you again, Mr. Secretary.
    And for some reason we are doing it flipped the way we 
ordinarily go left to right but today we are doing stage right 
to left, but we have the seven witnesses. Our first witness is 
Chris Cummiskey, Commissioner of the Georgia Department of 
Economic Development and Chairman of the Georgia Centers of 
Innovation Board of Directors. Our second witness is Drew 
Greenblatt. Mr. Greenblatt is president of the Martin Steel 
Wire Products of nearby Baltimore, Maryland, and represents the 
National Association of Manufacturers. Also testifying before 
us today is no stranger to us all, Douglas Holtz-Eakin. Mr. 
Holtz-Eakin is president of American Action Forum. Our fourth 
witness is Gregory Wilson, Special Advisor to the Financial 
Services Roundtable. Our fifth witness is Ms. Deborah L. Wince-
Smith. Ms. Wince-Smith is president and CEO of the Council on 
Competitiveness. Also testifying is Heather Boushey. Welcome, 
Heather. She is the Senior Economist at the Center for American 
Progress. And last but not least, Mr. Rhone Resch, welcome. He 
is the president and CEO of the Solar Energy Industries 
Association. Welcome to all of you. You are each recognized for 
5 minutes, and to help keep track of the time are those nice 
little lights in front of you, and I would ask that when you 
see the red you try to sum up as quickly as you possibly can. 
There are a lot of us to get through today and votes on the 
floor eventually. So we are going to start with Mr. Cummiskey. 
You are recognized for 5 minutes.

  STATEMENTS OF CHRISTOPHER CUMMISKEY, COMMISSIONER, GEORGIA 
DEPARTMENT OF ECONOMIC DEVELOPMENT; DREW GREENBLATT, PRESIDENT 
   AND OWNER, MARLIN STEEL WIRE PRODUCTS, LLC, ON BEHALF OF 
  NATIONAL ASSOCIATION OF MANUFACTURERS; DOUGLAS HOLTZ-EAKIN, 
   PRESIDENT, AMERICAN ACTION FORUM; GREGORY WILSON, SPECIAL 
 ADVISOR, THE FINANCIAL SERVICES ROUNDTABLE; DEBORAH L. WINCE-
 SMITH, PRESIDENT AND CEO, COUNCIL ON COMPETITIVENESS; HEATHER 
 BOUSHEY, SENIOR ECONOMIST, CENTER FOR AMERICAN PROGRESS; AND 
    RHONE RESCH, PRESIDENT AND CEO, SOLAR ENERGY INDUSTRIES 
                          ASSOCIATION

   STATEMENT OF CHRISTOPHER CUMMISKEY, COMMISSIONER, GEORGIA 
               DEPARTMENT OF ECONOMIC DEVELOPMENT

    Mr. Cummiskey. Thank you, Ms. Chairwoman, and Ranking 
Member. I want to thank the subcommittee for this invitation to 
speak to you today and for taking the time to address these 
very important issues.
    The topic at hand, innovation in manufacturing, is one that 
is very close to our hearts in Georgia. We are a State that 
cultivates innovation and creativity in this very strategic 
industry. Like most States, we have lost manufacturing jobs 
during the recent economic downturn but our recovery is coming. 
Our sector of employment in Georgia has increased for the 
fourth consecutive month and confidence levels remain high.
    This isn't your grandfather's manufacturing we are talking 
about. We are particularly strong in advanced manufacturing 
sectors like aerospace and automotive, both part of our 
strategic industry focus. The Georgia aerospace manufacturing 
sector accounts for approximately 28,000 workers in the State, 
and our aerospace exports in 2010 grew 23 percent to an all-
time high of $4.4 billion, seventh in the United States. 
Industry giants like Lockheed, Boeing and Gulfstream are part 
of our corporate aerospace community.
    Georgia's automotive industry began in 1909 with a small 
Ford plant. Today, Kia has invested approximately $1 billion in 
its first United States auto facility. Kia is just one of our 
more than 300 auto- and vehicle-related companies, employing 
20,000 workers. Other prominent automotive names are Pirelli 
Tire, Toyo Tire, ZF Industries and Johnson Controls.
    The men and women who comprise Georgia's manufacturing 
workforce are highly motivated, skilled and eager to embrace 
new ways of doing things. This is an attitude and an aptitude 
that we have deliberately cultivated in our workers in response 
to the challenges of the new world economy. We in Georgia 
realized very early that we would not be able to compete with 
other countries, particularly emerging economies, solely on the 
basis of wages. We are not just about low-cost manufacturing; 
we are about high-quality manufacturing. We enabled this 
through three key ways.
    First, Georgia stepped up early to ensure we had the most 
creative approach to workforce development in the Nation. 
Education and training is the most critical part of the 
manufacturing innovation process in Georgia. We accomplish this 
through economic development partnerships with our universities 
and our 26 technical colleges. Our Georgia Quick Start program 
was the first of its kind in the United States and has become a 
national model for customized workforce training. Offered to 
qualified companies free of charge to the State since 1967, 
Quick Start is part of the technical college system of Georgia. 
It is a soup-to-nuts process. Quick Start personnel will travel 
to a company's home State or home country, see how they do 
their processes, replicate them through a variety of 
technologies and then bring them back here. The program gives 
hands-on training to new hires, trains existing workers on new 
processes as well as staying with the company after it begins 
operation to continue to find trends and how to be more 
efficient. Quick Start has delivered more than 5,800 projects 
for client companies and prepared more than three-quarters of a 
million trainees.
    Possibly the best example of Quick Start's importance is 
its role in Kia's decision to locate in Georgia. Quick Start 
build a $22 million state-of-the-art training facility that has 
trained each of the currently 2,200 Kia employees and is about 
to train another 800, helping the company reach its full 
operational capacity ahead of schedule. The chairman of 
Hyundai-Kia has called Quick Start's training center a global 
benchmark, and the training center for Hyundai's new plant in 
Brazil is being modeled after the one here in Georgia.
    The concept has many imitators but we are proud to have 
instituted the original program in the United States and to see 
it grow into something that for many companies is the deciding 
factor in their choice to locate or expand to the State of 
Georgia. Georgia Quick Start is a powerful solution to develop 
a skilled workforce for innovative manufacturers.
    Another way Georgia is strengthening our manufacturing 
sector is through out Centers of Innovation program, which is 
unique in the United States. We saw the need that entrepreneurs 
and small companies with the potential for high growth were 
often having difficulty moving products and services into 
commercialization, so in 2003 then-Governor Sonny Perdue 
created the State-run program to connect them to Georgia's 
intellectual capital as universities as well as industry 
expertise they needed to jump-start their growth. The Center of 
Innovation for Manufacturing is one of six such centers in 
Georgia. It provides expertise in advanced manufacturing 
processes as well as customized training programs with the 
latest advanced robotics and PLC and CIM equipment, helping 
manufacturing companies develop a healthy bottom line.
    The center's friendly environment for research and 
development includes the latest prototyping equipment, allowing 
companies to test new ideas before investing the money. The 
center has worked with approximately 80 companies in the last 2 
years, partnering frequently with Georgia Institute of 
Technology to design innovative manufacturing processes and 
equipment and thus expand production.
    Suniva, for instance, is a great example of Georgia 
innovation blossoming from the ground up. This solar 
manufacturing company grew from successfully commercialized 
research at Georgia Tech. It manufactures the most efficient, 
low-cost photovoltaic cells on the market. The company is 
rapidly expanding its production capacity, and its new plant 
will open in 2011 with 400-plus-megawatt capacity. Suniva was 
ranked last year by Wall Street Journal as the number two 
venture capital-backed clean technology company in the United 
States and received the Renewable Energy Exporter of the Year 
award from the Export-Import Bank of the United States. Suniva 
was assisted along the way by the Georgia Center of Innovation 
for Energy. It is exactly the sort of company our Centers of 
Innovation program was created for.
    Another fact that sets us apart is our pro-business 
environment. Over the years, elected officials in Georgia have 
worked extremely hard to make sure the State regulatory and tax 
environment is such that it fosters business growth. Am I out 
of time?
    Mrs. Bono Mack. Sum up very briefly. Yes.
    Mr. Cummiskey. Our corporate income tax rates are 
incredibly low and conducive to business and our regulatory is 
very, very limited, which helps us thrive in this environment.
    Thank you for your time, and I will be happy to answer any 
questions at the end of the round of statements.
    [The prepared statement of Mr. Cummiskey follows:]



    
    Mrs.Bono Mack. Thank you.
    Mr. Greenblatt, you are recognized for--yes?
    Mr. Greenblatt. Chairman Bono Mack, in the witness's 
defense, our timer is not working.
    Mrs. Bono Mack. Then I apologize.
    Mr. Cummiskey. That is OK. I will get over it.
    Mrs. Bono Mack. I apologize.
    Mr. Greenblatt, you are recognized for 5 minutes. When the 
light turns yellow, I will make some funny faces at you, I 
guess, or something.

STATEMENT OF DREW GREENBLATT, PRESIDENT AND OWNER, MARLIN STEEL 
                       WIRE PRODUCTS, LLC

    Mr. Greenblatt. Good morning. My name is Drew Greenblatt. I 
am the president of Marlin Steel Wire. We are based in 
Baltimore, Maryland. I appreciate the opportunity to testify 
today on behalf of the National Association of Manufacturers. 
We represent some 11,000 factories in all 50 States, all 
industries, all sizes.
    The title of today's hearing raises an issue that is close 
to my heart. Marlin Steel Wire produces custom wire baskets 
like this and wire forms like this, precision sheet-metal 
fabrication assemblies, all manufactured 100 percent in the 
U.S.A. and we sell them all over the world. We export to over 
34 countries including this week, Holland, Japan, Sweden, 
Ireland and Canada. Twenty-five percent of our employees are 
mechanical engineers or designers. Innovative and dedicated 
employees have helped expand sales and jobs since I bought the 
company in 1998. We achieved record sales 4 years in a row.
    Manufacturers are seeing signs of economic recovery but we 
have a long way to go. Manufacturing lost 2 million jobs in the 
recession, and unemployment remains unacceptably high. 
Meanwhile, our competitors over in Europe, Asia and South 
America aggressively seek new customers and new opportunities. 
Their countries strategize for success in manufacturing.
    Manufacturers believe the United States must also embrace a 
comprehensive approach, one that we outlined last year in our 
policy guide, Our Manufacturing Strategy for Jobs in a 
Competitive America.
    First, we want to be the best country in the world to 
headquarter a company. Second, we want to be the best country 
in the world to do the bulk of our R&D, our research and 
development. Third, we want to be a great place to manufacture 
good and exports.
    We start with the goal that the United States will be the 
best country in the world to headquarter a company. It is 
critical that our national tax climate does not place 
manufacturers in the United States at a competitive 
disadvantage in the global marketplace. This week, my company 
shipped wire baskets for General Motors' assembly line in 
Canada, where the corporate tax rate is less than half of what 
we pay. It is easier for my Canadian competitor since his taxes 
are lower. He has no health insurance. This is bad for me. This 
is bad for my workers. It means less jobs in the U.S.A. A pro-
manufacturing tax policy must first acknowledge that when 
Congress raises taxes, it makes manufacturing in the United 
States less competitive. Congress should lower the corporate 
rate to 25 percent or even lower like Canada at 18 percent 
without imposing offsetting tax increases. Congress must pass 
permanent lower taxes for the over 70 percent of manufacturers 
that are S corporations and file as individuals like Marlin.
    Our health care costs also are constantly increasing, 
double digits, year in, year out. We provide all of our 
employees with health insurance. The cost problem has not been 
solved by recent legislation. Congress needs to revisit the 
solutions they proposed, and it is a problem and it is holding 
us back.
    Our second goal is that the United States should be the 
best country in the world to innovate, performing the bulk of 
their company's global research and development. We want those 
R&D jobs here. The R&D tax credit is important to achieve this 
goal. Congress extended it recently. However, it has passed and 
expired more than a dozen times. A little more permanence and 
certainty in all tax policy would be a good thing.
    Finally, our last goal is for the United States to be a 
great place to manufacture both to meet the jobs of the 
American market and serve as an export platform for the world. 
This means more U.S.A. middle-class jobs. Manufacturers rely on 
overseas markets. Ninety-five percent of the world's consumers 
are overseas, and most of our exports are manufactured goods. 
One of Marlin's main core niches is selling custom stainless-
steel material-handling baskets to Japanese automakers. As a 
matter of fact, this week we shipped to Mazda. Korean 
automakers have steadily increased their market share, offering 
a similar promising market. The U.S.-Korean free trade 
agreement if enacted will help Marlin Steel compete on a level 
playing field. I want to sell to Hyundai. I want to sell to 
Samsung. I want to sell to Kia.
    Rising energy costs also continue to hold back growth and 
job creation. Soaring oil prices have again stirred alarm.
    Mrs. Bono Mack. Mr. Greenblatt, excuse me. You are down to 
30 seconds.
    Mr. Greenblatt. Thank you. Even as the recovery takes hold, 
manufacturers temper our optimism with caution, whether it is 
the soaring price of oil or the Administration's aggressive 
regulatory agenda. We believe the best way to ensure jobs and 
economic growth is to enact a strategy with comprehensive and 
consistent policies that allow manufacturers to compete in the 
global marketplace.
    [The prepared statement of Mr. Greenblatt follows:]



    
    Mrs. Bono Mack. I thank the gentleman.
    Before we move on, we are going to do a highly technical 
fix to this. We are going to slide that clock down to the 
center and that is our technological answer to it.
    Dr. Holtz-Eakin, you are recognized for 5 minutes.

 STATEMENT OF DOUGLAS HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION 
                             FORUM

    Mr. Holtz-Eakin. Thank you, Chairman Bono Mack and Ranking 
Member Butterfield and members of the committee. It is a 
privilege to be here today. You have my written statement. Let 
me briefly make three key points.
    The first is the obvious, that jobs are the central 
consideration at this point in time. The second is that we need 
to shift the policy focus from so-called stimulus efforts 
toward genuine pro-growth policies that will enhance the trend 
in growth rate of the U.S. economy and thus provide those 
workers with the jobs they need. And then the third is some 
suggestions that such an agenda would begin with controlling 
spending to take off the table a looming sharp rise in the 
deficits and debt, tax reform that would make our Nation the 
best place to headquarter a company and to enhance our 
international competitiveness. The third would be the 
jurisdiction of this committee and trade, enhance our 
engagement in opening markets abroad. And the fourth, a 
regulatory review to really temper the large-scale increase in 
regulation we have seen in a wide variety of policy areas in 
recent years.
    Jobs is obvious. Despite the recent news that we have seen 
this week, a good ADP report, very good Institute for Supply 
Management report, this morning's report on lower UI claims, it 
still remains the case that with so many Americans out of work, 
it is far more likely that we see the unemployment rise before 
permanently declining than simply getting better on a sustained 
basis. So we have to keep a focus on this.
    Related to that, it is true that the economy is growing. It 
has been growing for six straight quarters. But that pace of 
growth, under 3 percent, is far too slow to sustain the kinds 
of job increases we need to get the 7 million workers who are 
out of work back into jobs and to provide for our children a 
standard of living that is better than the one that we have 
inherited. This is in fact typical of economies recovering from 
a financial crisis. We need to recognize that there will not be 
any quick fixes and instead focus on the kinds of policies that 
will allow us to grow more rapidly on a sustained basis and 
thus accelerate the possibilities even in the midst of a tough 
recovery.
    For such an agenda, I have lots in my written testimony. 
Here I want to just talk about two. First is the absolutely 
essential problem of taking on the projected debt in the United 
States. If one looks at any reasonable projection, either the 
Administration's budgets or those by the Congressional Budget 
Office, one sees that over the next decade we face perilous 
times. Despite the fact that either such projection would 
actually count on a recovery to full employment, a fact that a 
financial crisis will be a distant memory, would presume that 
we are no longer fighting overseas operations in Iraq and 
Afghanistan, and that we would be raising well above 
historically typical levels of taxes, 19, 20 percent of GDP. 
Despite all of that, deficits are projected to be over a 
trillion dollars 10 years from now. Something close to $900 
billion of that will be interest on previous borrowing. In the 
interim, the United States will have crossed the technical line 
for downgrade as a sovereign borrower, and we will have debt-
to-GDP ratios that are associated with the typical levels where 
financial crises occur. In short, we are on a path to disaster. 
The President's own Fiscal Commission described this as a 
national moment of truth where we had to put aside political 
budgetary gains and deferring of tough decisions to take on 
this problem.
    If you are a businessman trying to make a decision about 
the future, this is a recipe for either higher interest rates 
or higher taxes, or both, and there can be no more pro-growth 
move by this Congress and this country than to take off the 
table those kinds of threats and allow businesses to make 
investments in their workers and in their technologies and 
plants in order to grow more rapidly.
    So I think that it is imperative that this be the top 
agenda item. The only way to do it is to control spending. This 
is not a revenue problem in all those projections, and I would 
deeply and professionally disagree with the kinds of reports 
that have been mentioned earlier in this hearing from either 
Mark Zandi, who was one of my assistants on the McCain 
campaign, for the record, and not a chief policy advisor, and 
Goldman Sachs. Those reports are fundamentally flawed in two 
ways. First are technical. They make assumptions about the pace 
at which spending is cut down and the way it impacts the 
economy, which overstate their impact, and the second is just 
fundamental. There is no way in their analyses for forward-
looking expectations to enter. There is no one in their 
analysis who is looking to next year or even 10 years from now. 
They are fundamentally myopic analyses. Everyone in this room 
gets up every day and tries to see the future, are we coming 
out of this recession, can we see better times ahead, and they 
are doing their analysis on the assumption that no one looks 
past next week. They are deeply flawed and overstate the 
impacts.
    The last thing I want to close with is trade. The United 
States has given up its historic leadership in trade. It has 
been on the sidelines far too long with three pending trade 
agreements, some of which are crucial and irrational not to 
ratify and this committee has the jurisdiction to push that 
agenda forward. I would encourage them to do so. Thank you.
    [The prepared statement of Mr. Holtz-Eakin follows:]



    
    Mrs. Bono Mack. Thank you.
    Mr. Wilson, you are recognized for 5 minutes.

  STATEMENT OF GREGORY WILSON, SPECIAL ADVISOR, THE FINANCIAL 
                      SERVICES ROUNDTABLE

    Mr. Wilson. Thank you, Chairman Bono Mack, Ranking Member 
Butterfield and members of the committee. My name is Greg 
Wilson. I serve as a Special Adviser to the Financial Services 
Roundtable and its new Financial Stability Industry Council. On 
behalf of the roundtable, I am pleased to be invited to discuss 
the potential impact of new U.S. financial regulations on the 
economy and the implications for innovation and jobs. The 
Roundtable is a trade association of the largest, diversified 
financial services firms in the United States.
    Mrs. Bono Mack. Excuse me, Mr. Wilson. Would you please 
just pull the microphone--we can hear you clearly but I guess 
the TV audience cannot. Perhaps a little closer.
    Mr. Wilson. I have got a green light here. Here we go.
    Mrs. Bono Mack. Thank you.
    Mr. Wilson. So we need to be very mindful about the impact 
of the Dodd-Frank Act. So let me go over some solutions. What 
can we do as the Administration, the Congress and the financial 
services industry to make sure there is no negative impact of 
the new financial rules?
    Let me start with the Administration. President Obama 
should be commended for two recent actions but his actions need 
to be expanded and applied to the financial services sector. 
First, ensure that the President's new Council on Jobs and 
Competitiveness chaired by GE's Jeff Immelt also focuses on the 
financial services industry, not just manufacturing and trade.
    Second, ensure that the President's new order on regulation 
``promoting economic growth, innovation, competitiveness and 
job creation'' applies to the new Financial Stability Oversight 
Council and other financial regulators. Secretary of Treasury 
Geithner, this should be his major responsibility under the new 
Dodd-Frank Act and his role as chair of the council.
    Let me turn to what Congress can do, and I want to pick up 
on some of the statements in your opening remarks, Madam 
Chairman. I think there are some immediate initiatives that can 
be taken. In the consulting world, we would call these quick 
wins. First, demand that an economic impact assessment be made 
for all the critical regulations and rules coming out of 
particularly Title I of the Dodd-Frank Act, which affects the 
largest, most systemically important institutions and has the 
biggest potential impact on our economy, as I lay out in table 
one in my testimony on page 10.
    Second, legislate new requirements for full economic impact 
assessments for all future financial regulations. You could 
this bill on the suspension calendar in the next 30 days and 
begin to have a good bipartisan initiative to get to the facts 
and the diagnostics that I think need to be on the record as 
the Dodd-Frank Act rolls forward.
    Third, analyze the full impact of the new, more stringent 
restrictions for financial activities and practices on economic 
growth as required by Dodd-Frank. This is the only time in 
Dodd-Frank that the words ``economic growth'' are used. You 
won't find words like ``innovation'' and ``jobs'' anywhere 
particularly in the first title of Dodd-Frank.
    Fourth, ensure that the oversight council and the Office of 
Financial Research actually establish industry advisory 
councils as the Dodd-Frank already permits in order to have a 
more balanced dialog between regulated firms and regulators. I 
think this will result in more balanced outcomes and be good. 
The Secretary of the Treasury already has that in his sights 
and on his timeline. He just needs to follow through and 
appoint those committees.
    Fifth, hold the Treasury Secretary strictly accountable in 
the annual oversight council report for the impact on economy 
and jobs. Title I uses the words ``efficiency'' and 
``competitiveness'' and that is the closest you are going to 
get in Dodd-Frank. Again, you won't find the words 
``innovation'' and ``jobs'', even though they may be implied. 
So that is close enough for government work from my 
perspective. Even better, you could go back and amend the Dodd-
Frank Act to put the words ``innovation'' and ``jobs'' in there 
as part of this mandate to review going forward.
    Finally, Congress should review the regulatory burden of 
187 separate regulatory reports going to 16 different agencies 
to make them more streamlined and useful in the spirit of the 
new GAO report on government inefficient.
    Mrs. Bono Mack. I know the light is again not working but 
that concludes your time. Do you need to sum up with a sentence 
or two?
    Mr. Wilson. No, just that I have other remarks in there 
about what the financial services industry should be doing on 
its own and is starting to do, but thank you for your time.
    [The prepared statement of Mr. Wilson follows:]



    
    Mrs. Bono Mack. Thank you very much.
    Ms. Wince-Smith, you are recognized for 5 minutes, and I 
will give you a 1-minute warning.

STATEMENT OF DEBORAH L. WINCE-SMITH, PRESIDENT AND CEO, COUNCIL 
                       ON COMPETITIVENESS

    Ms. Wince-Smith. Thank you, Chairman Bono Mack, Ranking 
Member Butterfield and members of the subcommittee. I 
appreciate the opportunity to testify today.
    The U.S. manufacturing sector is a key engine of 
innovation, wealth generation, job growth and national 
security. America cannot retain its geopolitical leadership and 
economic vitality without a robust, vibrant, deep industrial 
basis driven by the design and production of high-value goods 
coupled to high-value services.
    The Council on Competitiveness is celebrating its 25th 
anniversary year. We are a nonpartisan group of CEOs, 
university presidents and labor leaders formed at the time when 
were concerned about the trade and technology challenges with 
Japan. Our unique membership looks at the issues that impact 
the Nation, not what is in the interest of any one sector or 
constituency.
    Recognizing the challenges facing American manufacturers in 
the global economy and the imperative for job creation and job 
retention, the council formally launched the U.S. Manufacturing 
Competitiveness Initiative last year, building on our 
pioneering work on innovation capacity, energy security and 
sustainability. We are very pleased that this initiative is led 
by one of our dynamic CEOs in America, Sam Allen, the chairman 
of John Deere.
    Our end goal, which will be presented at a national 
manufacturing strategy summit on December 8th, is to really 
give a comprehensive roadmap of what the government, the 
private sector and broader constituencies in our society need 
to do to take us to what we call the third millennium 
manufacturing opportunity. Just yesterday, we took a first step 
in this journey with the announcement of a first-ever public-
private partnership where four large American enterprises--
Deere, Lockheed Martin, GE, and Proctor and Gamble--are teaming 
to bring the power of modeling and simulation technology into 
the hands of our small- and medium-sized manufacturers, and 
this is a public-private partnership sponsored with support 
from the Economic Development Administration but with over $2 
million in commitment from the private sector.
    Today, I really want to highlight Ignite 1.0, the voices of 
American CEOs on manufacturing competitiveness. This is the 
first of four reports we will be issuing this year, and I want 
to emphasize four points that have come from the voices of over 
40 American CEOs. The first is that creative destruction of 
businesses and jobs is at the very core of competition. 
Policymakers have to stimulate new business creation and job 
creation by ensuring that we have the most vibrant and dynamic 
enabling conditions, the optimal capital cost structure, 
regulatory environment and access to the markets of the future. 
Let us not forget 95 percent of all consumers in the years 
ahead will live outside the United States.
    Two: Global economic competition is not a zero-sum game. 
Our global trading partners, yes, they are our competitors but 
they are also our partners.
    Three: Freedom of movement is a central driver of national 
competitiveness. Movement of capital, labor, scientists, 
engineers and ideas is critical. No great nation looks inward.
    Four: Manufacturing is much broader and diverse and has a 
higher multiplier in the economy than at any other previous 
time in history. It is an extended values system and it goes 
beyond just the making of the thing.
    Our CEOs have conveyed an unwavering belief that the United 
States has the resources, the capabilities and the will to be 
the most competitive manufacturing nation in the 21st century. 
While they have applauded recent agreements in the areas of tax 
policy and global trade, we have so much more to do. Let us not 
compete on the cost of capital or who has the best regulatory 
system. Let us level the playing field there and compete on 
ideas, talent and the game-changing innovation in industries 
that will reshape our world. Thank you very much.
    Mrs. Bono Mack. You will have one minute.
    Ms. Wince-Smith. Well, let me just conclude by saying that 
if we don't take the leadership on manufacturing, the rest of 
the world will and it is ours to lose.
    [The prepared statement of Ms. Wince-Smith follows:]



    
    Mrs. Bono Mack. Thank you.
    Dr. Boushey, you are recognized for 5 minutes, and again, I 
will give you a 1-minute signal.

  STATEMENT OF HEATHER BOUSHEY, SENIOR ECONOMIST, CENTER FOR 
                       AMERICAN PROGRESS

    Ms. Boushey. I appreciate that. Thank you, Chairman Bono 
Mack and Ranking Member Butterfield for inviting me here to 
testify today. My name is Heather Boushey and I am a senior 
economist with the Center for American Progress Action Fund.
    Until we fill the demand gap, we will have continued 
unemployment, which in turn will continue to drag down economic 
growth. Today's high unemployment was caused by the 
mismanagement of the economy in the 2000s, a financial sector 
only in service of its own profit rather than fostering 
productive investments, and a housing bubble, and we must 
address these root causes. The policies that will create jobs 
now are those that will make investments that not only boost 
employment in the short term but lay the foundations for long-
term economic growth.
    The private sector has been adding jobs every month for 
nearly a year now and at a faster rate than in the 2000s 
economic recovery. Even with the success of the Recovery Act in 
boosting job growth, at this pace we will reach 5 percent 
unemployment for many decades, and unemployment has stood at or 
above 9 percent for a record 21 months, and there is growing 
evidence that many workers may never find jobs at the level 
that they had prior to the great recession. Job losses have 
been widespread and not only concentrated in the sectors 
hardest hit by the bursting of the housing bubble. This 
directly contradicts the notion that the jobs crisis is a 
structural problem.
    The continuing slow pace of the jobs recovery stems from 
insufficient aggregate demand in the overall economy. Gross 
domestic product grew at an annual rate of 2.8 percent in the 
fourth quarter of 2010, the sixth quarter of positive growth in 
a row. Much of this was due to the Recovery Act and other 
policies aimed at addressing the fallout from the financial 
crisis. Yet our economy continues to have a gap between what it 
currently produces and what it would be producing if workers 
and the economy's productive assets were to be used at full 
employment.
    Investment is the key to creating jobs now and building the 
foundation for a higher-productivity future. Even though 
corporate America is flush with cash, investment is at its 
lowest level in more than four decades yet the cost of capital 
continues to be at lows not seen since the 1960s. Small 
businesses continue to point to a lack of customers, a lack of 
demand as their single most important problem. The National 
Federation of Independent Businesses reports that regulations 
are not nearly as important as poor sales.
    In our economy, we need to spend at least $2.2 trillion 
over the next 5 years just to repair our crumbling 
infrastructure. This doesn't even include things like high-
speed rail, mass transit and renewable energy investments we 
need to free ourselves from foreign oil and address climate 
change. Infrastructure has been a traditionally bipartisan 
issue and one that hopefully this Congress can build a bridge 
across to address.
    I live here in the District of Columbia, and across the 
street from me, a small business opened up a couple of years 
ago, a restaurant. This small-business owner has had to deal 
with not one, not two but three water main breaks because of 
the aging infrastructure here in the District of Columbia, and 
each time that business owner has had to close shop and not see 
customers, costing them money.
    We should not repeat the mistakes of the Great Depression 
with austerity policies that will not create jobs. There has 
been much talk this morning about the recent report from 
Goldman Sachs that estimates that the House-passed federal bill 
will decrease economic growth, and I would like to note that 
this was as reported by ABC News, these were estimates for 
their clients. These are people that are investing in America 
and they are trying to tell them how the policies here in 
Washington are going to affect economic growth, and I think 
that we should take their estimates very seriously. At the same 
time, we have heard Mark Zandi estimate that these policies 
that were implemented in the budget passed by the House will 
lead to fewer jobs here in the United States, an estimate of 
700,000 by the end of 2012.
    I want to note that the most important reason for the rise 
in the deficit was rising unemployment and falling incomes. 
Economists estimate that had Congress done nothing, the deficit 
would have ballooned to more than two and a half times as large 
as it actually will.
    And let us remember, it was deregulation that was brought 
us today's excruciatingly high unemployment. Last month the 
Financial Crisis Inquiry Commission clearly placed the blame 
for the crisis on the lack of oversight and regulation of the 
financial sector. As we move forward in terms of thinking about 
regulation, we need to make sure that it not only works for 
business but that we don't end up right back here in a few 
years because we are not focused on making sure that business 
also works for America.
    Finally, we need to make sure that if our goal of our trade 
policies is job creation, then we need to evaluate whether or 
not these policies will indeed create jobs here in the United 
States and whether or not they will reduce our trade deficit 
and on net create jobs. Recent empirical research shows that 
local labor markets that have seen increased exposure to 
Chinese imports have had higher unemployment, lower labor force 
participation and reduced wages.
    We need jobs now and we need the kind of investments that 
will transform our economy and renew long-term prosperity. 
Thank you.
    [The prepared statement of Ms. Boushey follows:]



    
    Mrs. Bono Mack. Thank you, Dr. Boushey.
    Mr. Resch, you are recognized for 5 minutes.

   STATEMENT OF RHONE RESCH, PRESIDENT AND CEO, SOLAR ENERGY 
                     INDUSTRIES ASSOCIATION

    Mr. Resch. Madam Chairwoman Bono Mack, Ranking Member 
Butterfield and members of the subcommittee, thank you for the 
opportunity to testify today. I am testifying on behalf of our 
1,000 member companies and the 100,000 American citizens 
employed by the solar industry.
    In the last 2 years, during one of the worst economic 
downturns in our Nation's history, the solar industry has 
thrived, becoming the fastest-growing industry in the energy 
sector and one of the fastest-growing industries in any sector 
in the United States. In 2010, the solar industry grew at a 
rate of 67 percent and now employs over 100,000 Americans 
across all 50 States. From 2009 to 2010, we doubled employment 
in the United States, creating almost 50,000 new jobs while 
most other industries were contracting. We are putting 
plumbers, electricians and carpenters that lost their jobs due 
to the collapse of the housing industry back to work. We are 
building new factories and providing existing manufacturers 
with new large customers, and we are providing opportunities 
for small businesses to reinvent themselves and become part of 
one of the most exciting changes to our economy to occur in a 
generation.
    As you can see by this chart, the U.S. solar industry is 
expanding at a consistent 50 percent annual growth rate over 
the last 4 years. Photovoltaic installations fully doubled in 
2010 in the United States while construction began on dozens of 
massive utility-scale solar power plants that will be completed 
over the next several years, employing thousands of Americans 
and bringing billions of dollars of economic investment to the 
southern half of the United States. Things are bright for solar 
today, but that will not last unless the right policies are 
adopted.
    The U.S. solar industry has created opportunities for over 
100,000 Americans. Take, for example, Justin Cox, a technical 
support rep at Sungevity, a company that is expanding and will 
soon operate in eight States. Up until 2 years ago, Justin was 
a soldier. When he came back after serving in Iraq, he found a 
job in the solar industry and now applies the leadership and 
technical skills he gained in the Army to expand his company. 
The U.S. solar industry is welcoming back thousands of veterans 
like Justin with new opportunity, and these aren't just jobs, 
these are careers.
    The growth of the industry and the creation of jobs is 
evident in all of your districts and all of your States. For 
example, in Chairwoman Bono Mack's district, there is a 21-
megawatt solar photovoltaic project near Blythe, California. 
This is one of the largest PV projects operating in the United 
States. The project developer and module supplier for the 
project is an American company that manufacturers in the 
Midwest with over 1,000 American workers. Also in Blythe, a new 
1,000-megawatt concentrating solar power plant, the Solar Trust 
of America-Blythe, is under development. It will be the largest 
solar project in the world, producing enough clean energy to 
power 300,000 American homes. Unfortunately, the Blythe project 
has been placed at risk by provisions of H.R. 1, which 
eliminate the funding for the project's pending Department of 
Energy loan guarantee application.
    Solar's reach goes far beyond California. Unfortunately, 
Congressman Barton isn't here but the next two slides show 
facilities in Texas. This is a massive polysilicon 
manufacturing plan in Pasadena, Texas, which provides feedstock 
material for the solar industry. And the next slide shows a 
state-of-the-art solar power plant in San Antonio, Texas.
    And in Clarksville, Tennessee, located in Representative 
Blackburn's district, Hemlock Semiconductor is building a $1.2 
billion polysilicon manufacturing facility to supply the solar 
industry. This plant will employ up to 1,500 workers during 
construction and over 1,000 workers for permanent operations 
when completed at the end of this year. Also in Tennessee is 
Sharp Solar's panel factory located just south of 
Representative Blackburn's district. The factory expanded in 
2010 and now has over 500 employees.
    So how do we keep this kind of solar job growth going? To 
succeed, we need stable tax policies. We need tax policies such 
as the section 1603 treasury program to be continued and 
incentives for solar manufacturing to be restored. We also need 
policies that facilitate financing for clean energy 
technologies that cannot be obtained in the commercial 
marketplace. To support these industries, Congress should 
consider a variety of financing mechanisms including the Clean 
Energy Development Administration. But what is most important 
today is for Congress to restore funding to the DOE loan 
guarantee program.
    Unfortunately, measures such as the provisions in H.R. 1 
Continuing Resolution that eliminate all funding for the 
pending renewable and other non-nuclear loan guarantee 
applications are a step in the wrong direction. In its current 
form, H.R. 1 would likely kill as many as 30 clean energy 
projects representing tens of billions of dollars of economic 
development. With that, it will kill jobs like Jim Amadeo's, 
who is in Illinois, a solar plant operator. SEIA respectfully 
requests that in the C.R. negotiations with the Senate that the 
House reverse the cuts to the section 1705 loan guarantee 
program.
    In conclusion, SEIA, our 1,000 member companies and our 
workforce of 100,000 strong is eager to work with Congress on 
important policy initiatives to continue to grow the solar 
industry and solar jobs.
    Once again, I deeply appreciate the opportunity to testify 
before the subcommittee and I would be happy to answer any of 
your questions.
    [The prepared statement of Mr. Resch follows:]



    
    Mrs. Bono Mack. Thank you, Mr. Resch.
    The chair will recognize herself for the first 5 minutes of 
questioning, and I would like to begin with Ms. Wince-Smith.
    In your written testimony, you state that--you call 
something the creative destruction of jobs and say it is at the 
very core of competition and that policymakers should not try 
to restore jobs or industries that have become uncompetitive. 
Can you explain what you mean by creative destruction and 
provide examples?
    Ms. Wince-Smith. Well, a very simplistic example is back at 
the turn of the century when there was an effort to keep the 
buggy business in place when we were moving to automobiles. So 
as part of the whole technological innovation that goes 
throughout human history. So let us focus on, the jobs and 
industries of the future, recognizing that there is going to be 
tremendous productivity gains coming from the intersections of 
biotech, nanotech, information technology and not the jobs 
really that are more commoditized and really can be performed 
at a lower cost and more efficiency elsewhere.
    Mrs. Bono Mack. In it, though, you say policymakers 
shouldn't try to restore those jobs but can you sympathize or 
understand what Members of Congress do go through when they see 
industries fleeing their districts for whatever reason? Can you 
speak to that a little bit further? Because as a Member of 
Congress when this happens, it is very painful. But can you 
explain why you think it is still beneficial?
    Ms. Wince-Smith. Absolutely. In fact, if you look at the 
textile industry, which is an industry where we led the world 
in the 19th and 20th century, there are tremendous 
opportunities to use modern technology to revitalize that 
industry. So rather than focus on competing with Pakistan on 
certain types of cloth, let us focus on the industry that is 
going to embed smart intelligence into the needs of the 
military in textiles. So I think what we really need to look at 
is, how do we take these industries to the next level and have 
a skilled workforce to go with that as opposed to just the 
status quo.
    Mrs. Bono Mack. So what you are saying is, we are actually 
preventing the growth by sort of dumbing down technologies?
    Ms. Wince-Smith. Absolutely.
    Mrs. Bono Mack. And you testified that manufacturing today 
has a much higher multiplier in the economy than at any time in 
past history. Can you quantify that multiplier, and how does it 
compare in past times?
    Ms. Wince-Smith. Yes, I can actually give you the data for 
the multiplier right now. It is about $1.4 in output versus 58 
cents for any other sector. And we will submit that complete 
data set for you, but it is very, very significant, and also, 
it is beyond the traditional view of manufacturing. You have to 
look at the whole value system around that including the 
services that support the manufacturing.
    Mrs. Bono Mack. Thank you.
    Mr. Greenblatt, today's Washington Post reports that 
Maryland Governor Martin O'Malley wants to double the State's 
surcharge on electric bills. That is to pay for construction of 
offshore wind farms. Can you talk about how that would affect 
your competitiveness? And I am a Californian. I believe that is 
going to increase your energy costs and that is going to affect 
you in a big way. Can you talk about it?
    Mr. Greenblatt. It is not a good idea. We are in favor of 
having low energy--we should eliminate taxes for manufacturing 
on energy because we are creating jobs when we build in the 
State of Maryland, and when you make it harder for us to 
compete with Virginia or Pennsylvania or China or Mexico, we 
are going to lose jobs in our State. It is very shortsighted.
    Mrs. Bono Mack. Thank you. Would you talk a little bit--the 
free trade agreements, you specify that they would be very 
helpful. Can you go into that, why they would be helpful for 
you?
    Mr. Greenblatt. Because it will give us almost 100 million 
new consumers we could shoot for, we could sell to. For 
example, Korea, Panama, Colombia have almost 100 million 
consumers, and we want to compete, we want to grow, we want to 
hire more people in Baltimore and export to Korea, for example. 
Right now when I ship a wire basket to Korea, there is an 8 
percent tax against me. Once the Korean trade agreement is 
approved and enacted by the Congress, that 8 percent will go 
away. So we will be much more competitive and we are going to 
hire more people in Baltimore that are unemployed now so we can 
improve our economy.
    Mrs. Bono Mack. Thank you.
    Mr. Resch, are you now or have you ever been a Californian?
    Mr. Resch. No, but I have always wanted to be.
    Mrs. Bono Mack. Have you ever been to Blythe?
    Mr. Resch. No, I have not yet.
    Mrs. Bono Mack. Can you say--you talk about the loan 
guarantee program but can you say that the solar projects in my 
district have never had regulatory impediments that have 
stopped the development? Have there been sort of cross policies 
that have intersected where you all have found the development 
slowing down because of regulation?
    Mr. Resch. Absolutely, land-access policies, siting and 
permitting policies. We face the same kinds of impediments that 
any large industrial face would in siting in America today.
    Mrs. Bono Mack. Have you ever scratched your head about why 
the government does things the way they do?
    Mr. Resch. Of course, and----
    Mrs. Bono Mack. I mean, you spent your time talking about 
the loan guarantee program but it is my hope that we talk about 
regulations that are slowing down prosperity in our country, 
and if you can spend 10 seconds--I am over my time, so 5 
seconds talking about if the truth is regulation has impacted 
you as much as any loan guarantee program, correct? Yes or no 
is fine.
    Mr. Resch. The answer is yes, and we have the ability to 
deploy very, very rapidly thousands of megawatts here in the 
United States, much faster than you will see in clean, coal, 
natural gas or even new nukes, but without removing some of 
those regulatory impediments, we will never see that happen.
    Mrs. Bono Mack. The chair will recognize Mr. Butterfield 
for 5 minutes.
    Mr. Butterfield. Thank you, Madam Chairman.
    Dr. Boushey, the Republican C.R. that was put forth a 
couple of weeks ago to fund the government through the end of 
this fiscal year takes what I call a ``whack and hack'' 
approach to spending cuts. The approach taken in the proposal 
put forth by the President is a bit more surgical and 
strategic, to say the least. In particular, the Republicans 
have proposed cuts of $8 billion from infrastructure, $5.5 
billion from R&D, $5.1 billion from education, $26.7 billion in 
cuts to Pell grants for low-income college students. The 
President, on the other hand, has proposed increases in these 
areas. These are also three areas that the manufacturers and 
the Competitive Council and all of us on this side seem to 
agree are key to our long-term economic competitiveness and 
stability.
    Dr. Boushey, if we follow the approach to federal spending 
cuts put forward by our friends on the Republican side and the 
Republicans promise of job growth through spending cuts fails 
to materialize, will these cuts do anything really to cut the 
deficit, in your opinion? I have looked at your r AE1sum and 
you have a very impressive background and you are an economist. 
What is your opinion on this? Will it affect the deficit in any 
way?
    Ms. Boushey. Well, two comments. First of all, there are 
two sides to the deficit, right? There is revenue and there is 
spending, and one of the challenges of the great recession and 
where we are right now is that revenues are down because people 
don't have incomes because we have nearly 14 million people out 
of work. Those people without incomes, without jobs, they don't 
pay as much in taxes, if any, and then that of course leads to 
a growing deficit. You also have more people who need services, 
who don't have jobs and so they need more assistance. So, yes, 
if these measures that have been taken in this C.R. do not lead 
to economic growth, then certainly that will increase the 
deficit, but moreover, we are really sort of cutting off our 
nose to spite our face with this C.R. in that we need these 
investments in our long-term economic future. We need to be 
investing in education. We need to be investing in 
technologies. We need especially to be investing in 
infrastructure. Much of our infrastructure in the United States 
is aging, it is frayed and it just don't work, and so we need 
an infrastructure that supports all of the businesses in 
America so that they can compete.
    Mr. Butterfield. So as a conclusion that if we make these 
massive cuts in spending that it is not going to result in 
America's competitiveness being improved?
    Ms. Boushey. I am very afraid that it will reduce our 
competitiveness, and the Center for American Progress and the 
Economic Policy Institute just released a letter earlier this 
week signed by over 325-some-odd economists including a number 
of Nobel laureates saying that this budget, that that C.R. will 
hurt our competitiveness because we do not make the investments 
that we need to make in America.
    Mr. Butterfield. Dr. Boushey, while I am with you, let me 
ask you this. In your testimony you note that the Federal 
Reserve survey of senior loan officers shows that while bankers 
are lending for mergers and acquisitions, which ultimately 
leads to job losses, they are not lending for investment in 
plants and equipment that will create jobs and expand economic 
opportunities. Can you explain more about this?
    Ms. Boushey. Well, what, of course, we have seen since the 
end of the--the financial crisis led to tightening credit 
conditions and we have seen that across the board. We have seen 
that it continues to be the case for small businesses that they 
are facing tight credit conditions and that that is a part of 
the problem, especially for the small business owners who need 
those funds to make those investments.
    Mr. Butterfield. Let me go to you, Mr. Resch, if I can. 
With the situation in the Middle East as it is, particularly in 
Libya--and gas prices are on the rise yet again. As of 
yesterday, gas prices had increased in each of the last 8 days 
by a total of 24 cents. The national average stood at $3.39 for 
a gallon of gas. Some are speculating that the price per gallon 
could hit $4 by the summer. Let us pray that that does not 
happen. Rising fuel prices can and will have a ripple effect 
across our fragile economy. This isn't a new or surprising 
development for anyone. We have long known that our dependence 
on foreign oil puts our economic security in the hands of 
others.
    Mr. Resch, what do you think we must do to spur demand in 
the United States for clean energy technologies?
    Mr. Resch. It is absolutely critical that we do so, and 
part of it is education, but just in the same way that we 
provide subsidies to the oil and gas and coal industries, we 
need to make sure that we are providing a level playing field 
for wind, solar and other technologies. Unfortunately, our 
policies are on again, off again, 1 year, 2 years, where those 
industries enjoy permanency. So providing a stable regulatory 
and policy framework is absolutely critical. The investment is 
there. The infrastructure is built. We are going to see these 
industries continue to grow very, very rapidly as long as we 
provide stability for the business environment.
    Mr. Butterfield. It is sad that we get to $4-a-gallon 
gasoline before the American people really concentrate on the 
importance of renewable energy.
    Mr. Resch. It is amazing.
    Mr. Butterfield. Thank you for the work that you do.
    I yield back.
    Mrs. Bono Mack. I thank the gentleman.
    The chair recognizes Ms. Blackburn for 5 minutes.
    Mrs. Blackburn. Thank you, Madam Chairman.
    Ms. Wince-Smith, I appreciate that you mentioned creative 
destruction, especially in the creative economy as we look at 
technologies. The lifecycle is so sort and I think it is 
important that we not try to prolong the lifecycle of a product 
that the American people do not want. So thank you for 
mentioning that.
    Mr. Cummiskey, I want to come to you. Very quickly, 
Georgia, is it a right-to-work State?
    Mr. Cummiskey. Yes, ma'am, it is.
    Mrs. Blackburn. OK. And that I would assume helps the Quick 
Start program?
    Mr. Cummiskey. It helps a lot of things including Quick 
Start, yes, ma'am.
    Mrs. Blackburn. And if you would submit for me the budget 
that you have for Quick Start and then the dollar, the ratio on 
your return for investment. I would love to know that. It 
sounds like a great program, and sometimes we in Tennessee at 
your border get a little bit jealous of some of the work you 
are doing there. What I would also like to know from you, 
because of the work you all are doing in some of the high-tech 
industries, what are the five things that you hear from the 
companies that you are working with when they talk about the 
Federal Government and they say they need to get this, that or 
the other off the book and you can just submit those for the 
record, and we would appreciate knowing what those five things 
are. We need to drill down and get some of these onerous 
regulations off the books.
    Mr. Cummiskey. Yes, ma'am.
    Mrs. Blackburn. OK. Dr. Holtz-Eakin, for you, I appreciated 
that you talked about the households, businesses, governments, 
international partners and the effect the budget has there. I 
would love to have from you kind of a checklist as you look at 
this committee and our goal being to energize domestic 
production and manufacturing, how we best do that. As you look 
at these four sectors, what your advice would be on five items 
that we could do that you see would serve us well.
    Mr. Holtz-Eakin. I would be happy to submit that.
    Mrs. Blackburn. Thank you. I appreciate that.
    Mr. Wilson, I want to chat with you a minute, because your 
group supported the Dodd-Frank or Frank-Dodd, whatever you want 
to call it, bill, and I have to----
    Mr. Wilson. Actually, Congresswoman, the roundtable did 
not.
    Mrs. Blackburn. Oh, they did not? OK. Well, I have to tell 
you, I hear from my bankers and small businesses out in the 
district as we are doing these listening sessions that this is 
horrific. They want this thing off the books because it impairs 
their ability to get credit and they see it as a true 
impediment. I would love to hear from you your thoughts on how 
that legislation has and will continue to affect small 
businesses, and even though we don't have jurisdiction over 
that piece of legislation, I think that it prohibits people 
moving to the next generation of technology that Ms. Wince-
Smith has, individuals that want to innovate something or a 
company that wants to locate in Georgia. So can you give me 
about 30 seconds on that one?
    Mr. Wilson. Sure. I think one of the biggest concerns as I 
tried to make clear in my remarks is that there is still a lot 
of uncertainty about what the rules of the road are going to be 
going forward. So on top of the crisis, on top of not knowing 
what your capital liquidity requirements are going to be going 
forward and we may not know what those are going to be until 
the end of the year given the current state of U.S. rulemaking. 
None that helps establish the certainty nor do we know the full 
economic impact of what that is going to be. I happen to think 
that the 250 new rules coming out of Dodd-Frank are going to 
have a negative effect on economic growth and job creation. I 
can't prove that you today. That is the kind of thing where I 
think the economic impact assessments that I referenced in my 
testimony would be useful, that either this committee or the 
Financial Services Committee could request of the Treasury and 
other financial regulators, or my idea of putting it on a new 
legislative requirement that all new future financial rules 
have a true economic impact assessment to----
    Mrs. Blackburn. Basically like we did in the pledge with 
the $100 million impact.
    Mr. Cummiskey, submit to me also how much you all have 
increased your exports in Georgia. I would be appreciative of 
knowing that, and give your governor my regards.
    Mr. Cummiskey. I will.
    Mrs. Blackburn. Mr. Resch, I would love to come to you for 
just a second, please, sir. Your member companies, how many 
receive government subsidies?
    Mr. Resch. There are just a few that have received any kind 
of form of grants to help develop----
    Mrs. Blackburn. And you don't know how much those total?
    Mr. Resch. I would have to look it up, but it is a pretty 
small R&D that exists in the solar industry.
    Mrs. Blackburn. OK. How many of those businesses would be 
viable without those government grants?
    Mr. Resch. Most of them would be, but what they are trying 
to do is really advance the technology beyond where the state 
is today, to expand applications into military applications, 
portability, increased efficiency drive down costs so those 
programs are really designed to kind of lift up the industry, 
similar to what you see in R&D programs for other energy 
technologies that----
    Mrs. Blackburn. OK, and then in 2005 you testified before 
this committee that tax incentives were necessary to jump-start 
the solar market but that those incentives should decline over 
time, so do you still hold that position?
    Mr. Resch. You know, I think our industry needs this very 
stable platform in order to build upon. We have tax credits 
that exist through 2016. By 2016, we are hoping to be the 
source of----
    Mrs. Blackburn. Yield back.
    Mrs. Bono Mack. Thank you.
    The chair recognizes Ms. Schakowsky for 5 minutes.
    Ms. Schakowsky. Well, following up on that, Mr. Resch, how 
viable do you think the oil and gas industry would be without 
the $40 billion in subsidies they get over 10 years?
    Mr. Resch. I think the reality is, we need all energy 
sources. We are dependent upon foreign sources of energy right 
now. I think we need to refocus on our domestic sources and 
look at technologies like solar and wind that could be 
manufactured here, that could be deployed on homes and on 
businesses and in utility-scale applications.
    Ms. Schakowsky. But do you think we still need to 
subsidize, especially now that gas is at $100 a barrel once 
again? Do you think that they really need to be subsidized?
    Mr. Resch. Certainly it doesn't make any sense to subsidize 
an industry that is as profitable as the oil and gas industry 
while not providing the kinds of support for emerging 
technologies that are actually creating jobs here in the United 
States. But when you look at the economics of oil and gas, 
there is no doubt there are opportunities to encourage drilling 
that probably do require some kind of tax incentives, but 
ultimately what we want to do is make sure we support all of 
the energy technologies because we are going to need more of it 
going forward, especially more of the clean energy 
technologies.
    Ms. Schakowsky. Thank you.
    I want to ask a question that I have been mulling over for 
quite a while now. In the United States of America, the income 
inequality has been growing enormously over about the last 30 
years so that right now about the top 1 percent of earners 
control about 39 percent of the wealth, which is more than the 
bottom 90 percent. The top .001 percent of Americans, the very, 
very rich, have an average income of about $27 million and the 
bottom 90 percent have an average income of about $31,000. It 
seems to me that that is a problem, not only for our economy 
but for our democracy as well when we have that kind of income 
inequality, and I am wondering if anybody wanted to comment on 
that. It seems like we are still going in the direction rather 
than of high-wage economy toward a low-wage economy. We still 
see while manufacturing is picking up, we still actually give 
some incentives for businesses to go overseas. Does anybody 
want to comment on this? Yes, Ms. Wince-Smith, and then we will 
go to Dr. Boushey.
    Ms. Wince-Smith. Well, we have a lot of data at the Council 
on Competitiveness over the years that really showed the direct 
correlation between educational attainment and income levels 
over time, and you are correct about the growing inequality 
gap. But on the issue of--and so our whole education strategy 
is--and of course, we spend more per child from K-12 than any 
other country in the world outside of Switzerland and we are 
not getting the outcomes. So the whole issue around how we get 
the impact from the investment in education is huge going 
forward.
    And the other thing I would say on, the issue of low wages 
and how that relates to manufacturing, even in countries such 
as China now, there is tremendous data that their wage 
structure is increasing as they become more productive and 
companies are not investing in China because of low wage. It is 
the skill of the workers, it is the overall capital structure, 
regulatory environment. So we have to look at all of these 
things as a system and really optimize what do we need to do to 
ensure we have the highest skilled workers and do the best 
high-value activity in this country.
    Ms. Schakowsky. Although it is also true that productivity 
has gone up even as average wages for the middle class have 
done gown.
    Dr. Boushey?
    Ms. Boushey. You are right about that, Congresswoman, that, 
as we have seen America become wealthier and we have seen 
workers in the United States become more and more productive, 
you have seen an increasing divergence between how much the 
average worker is getting of those productivity gains or not, 
and that has been a trend that has been going on for the past 
30 years.
    One of the things we have talked about on this that many 
folks on this panel have talked about today is understanding 
the economic impact of regulations and understanding the 
economic impact of what government is doing. And I think that 
what your question about inequality points us to is thinking 
not just what it means for profits but what does this mean for 
the kinds of jobs that are being created and not just for folks 
at the very, very top but across the distribution. When we are 
talking about jobs in the United States, we have to remember 
that six in ten workers who are in this economy don't have a 
college degree, and are we creating good jobs for them, and 
they are indeed good customers for many of the kinds of 
businesses and things that we have been talking about here on 
this panel.
    Ms. Schakowsky. Thank you. I yield back.
    Mrs. Bono Mack. The chair recognizes the gentleman from 
Kentucky, Mr. Guthrie.
    Mr. Guthrie. Thank you, Madam Chairman. Thank you for 
recognizing me.
    I first want to talk, I know we have had Mr. Zandi quoted 
for his proposal or his analysis, and also I believe he is the 
one that said that--resounding success, which most people that 
defend this thing was actually well, it would have been worse 
if we hadn't done it but the President said it is going to 
create 3.5 million jobs and 8 percent unemployment so if you 
are going to define something as resounding success, you might 
want to say at least you hit the goals you put forward.
    Mr. Holtz-Eakin, I know you are familiar with the Goldman 
Sachs study. Do you want to comment on that since it has been 
quoted here today and why you think it is probably not the best 
analysis?
    Mr. Holtz-Eakin. Well, I certainly that the fundamental 
flaw with these analyses is that there is no conduit anywhere 
in them for someone to be worried about the future. They are 
entirely driven by the current cash flows, and so mechanically 
if the Federal Government spends less, that cash flow goes 
down, they say the economy is smaller. There is no ability for 
the private sector to recognize that taxes aren't going to go 
up in the future, interest rates are going to explode, there is 
not going to be a financial crisis so I am going to make the 
investment, get offsetting impacts. That is the basis reason to 
be doing this. So the studies are rigged to be at odds with the 
basic motivation for the policy, and I think they shed no light 
on the potential effectiveness of them whatsoever in the same 
way that they were very misleading about what would happen with 
the stimulus bill.
    We are in the middle of a recovery that is driven by 
destroyed balance sheets. Households' homes are worth a lot 
less than they used to be. Their pensions have been damaged. 
Governments have red ink as far as the eye can see. None of 
this is about the current cash flow. This is about the fact 
that the assets and liabilities don't line up in any deep way 
but we have got the wrong analysis injected into that 
situation. You get bad policy advice.
    Ms. Boushey. Can I comment on that?
    Mr. Guthrie. Yes.
    Ms. Boushey. I would like to comment on that for a moment. 
You know, when we think bout economic growth, we often sort 
of--maybe it is sort of a black box so let us sort of open that 
up for a second. When you look at our gross domestic product, 
there are four basic components: consumption, which is about 70 
percent of GDP, investment, government spending and net 
exports. In the short term, and what these models that the 
Goldman Sachs folks put forward, what these models measure is 
the impact over the next couple of years of reducing one of 
those components in a significant way. So in a moment when we 
already have so many individual consumers cutting back, we 
already see investment is at decades lows, right? So firms 
aren't investing because they don't see customers. People don't 
have any money, as Dr. Holtz-Eakin said, because of the 
unemployment and also the reduction in their balance sheets. 
The decline in spending from the Federal Government will reduce 
growth in our economy.
    Now, over the long term, of course, we need to be concerned 
about the taxes, the tax increases to pay for that, but in the 
short term where we have high unemployment, that is what that 
model is showing you.
    Mr. Guthrie. But also I want to say I know anecdotally a 
lot of businesses aren't investing because they are concerned 
about the regulatory environment and the uneasiness that is 
coming forward. I know that from personal experience from 
people that I know. And so those of us who are concerned 
understand there are investments that are going to yield in the 
future. We spend a lot of money on education. That is something 
I was driven by in the state legislature. When you look at what 
I think we are looking at, inflation that is coming if we don't 
get control of our budget deficit by printing money inflation 
is going to come. Interest rates, pressure has to be there 
eventually. I know they are record low. But looking at why 
does--if we say investments in the long term, we are looking in 
the long term and not trying to be, well--you are not trying to 
cut your nose off to spite your face. What we are trying to do 
is, how are we going to have a sustainable future and a 
sustainable budget, and if we don't do it now, then when? Mr. 
Holtz-Eakin?
    Mr. Holtz-Eakin. I just have one thing. These models are 
used by policymakers at times and they can be useful. I have 
been in the White House twice. I used these models when I ran 
the Congressional Budget Office. But they are missing things 
that are central to the economic moment. They, for example, 
assume a stable regulatory environment. We have an avalanche of 
new regulations in Washington. Last year we had a record number 
of Federal Register pages and this year we are coming to see 
come online Dodd-Frank, 240 rulemakings, 20 times more than we 
have ever seen, the Affordable Care Act, an extraordinary 
regulatory expansion, the EPA boiler rules, five other 
rulemakings in process. There is nothing in those models that 
recognizes what is happening to the business community in 
reality.
    Mr. Guthrie. And manufacturing is a pathway to the middle 
class for so many people, and that is why we have to make sure 
we preserve that in the environment.
    I know you probably want to comment. I only have 20 
seconds.
    Ms. Boushey. Certainly, completely, manufacturing is 
certainly vital to American workers. But two things. I mean, 
one on inflation. I mean, we are at a moment where we are not 
seeing a lot of pressure on the capacity here in the United 
States. We are not seeing pressure on employment, we are not 
seeing pressure on our productive capacity. It remains at about 
76 percent of----
    Mr. Guthrie. We are seeing record-high commodity prices.
    Ms. Boushey. That is true, but there is a lot of----
    Mr. Guthrie. There are other reasons for that. I 
understand.
    Ms. Boushey. And so that is actually again why economically 
it makes sense that this is a good time for government to 
invest, right? You have bridges that you need to invest in. Now 
is the time to do it. I will stop there.
    Mrs. Bono Mack. The chair recognizes Mr. Harper for 5 
minutes.
    Mr. Harper. Thank you, Madam Chair.
    You know, one of the things that we have noticed in my home 
State of Mississippi is that I haven't found any business or 
any industry yet that believes that they are underregulated, 
and I guess what I would like to ask first of all is, if I 
could ask Commissioner Cummiskey, in your State, what have you 
seen that has worked that you would say would be good for other 
States and for us to look at?
    Mr. Cummiskey. I go back to what I talked about, about 
those type of endeavors, but our trade, we put a lot of time 
and effort into our trade and not just with large companies but 
with small business, less than 20 employees, and opening up 
pathways to people all across the State through our trade 
offices and our offices both in Georgia and outside 
internationally who really have had great success finding new 
markets for them. Going back to that, one thing that has worked 
is, every time a free trade agreement is signed, we have seen 
exports to those new areas increase by 206 percent. So that is 
what is working right now, and that is one other area that I 
didn't get a chance to talk about because of time issues but 
trade and trying to find new markets and putting some energy 
and time into that has paid off exponentially for us right now.
    Mr. Harper. This is for anyone on the panel. As far as 
recommendations on changes in the tax code, what would come to 
the top of your mind?
    Mr. Holtz-Eakin. I want to echo the comments that were made 
in Mr. Greenblatt's opening remarks. Our corporate tax code is 
at odds with our ability to compete around the world. We are 
the last major economy that clings to a worldwide system of 
taxation. Everyone else has gone to taxing companies only on 
the basis of their activity in the jurisdiction, whether it is 
the United States or Brazil or Germany. We as a result are at a 
fundamental disadvantage in the way we structure our tax 
system, and our rate is way too high. Again, the President's 
fiscal commission said we should move toward an internationally 
competitive rate and a territorial system. Absolutely, 
positively, it is the top thing to do in the tax code.
    Mr. Harper. And if you did that, in what time period would 
you expect to see a turnaround or an impact in this country if 
we made that change?
    Mr. Holtz-Eakin. I think you should just cut the rate right 
now. We have to end up there anyway so why wait? You would get 
a boost in the near term and you get sensible tax policy in the 
long run.
    Mr. Harper. Yes, sir?
    Mr. Greenblatt. I think you also have to reduce the 
complexity. We are paying about 40 grand a year in accountants 
and companies to make sure that we pay the right amount of 
payroll tax, make sure we pay the right 401(k). If we make any 
mistakes, in inadvertent booboos, we get very large fines, even 
if we are not meaning to do anything. So we spend over 40 grand 
a year. I would much rather hire two unemployed Baltimore city 
steelworkers, get them working for me rather than paying my 
accountant for this.
    Mr. Harper. Yes, ma'am?
    Ms. Wince-Smith. I would just add and support what Dr. 
Holtz-Eakin has said. You know, we see all over the world other 
councils on competitiveness that are partners of ours actually 
making fun of the United States now because of our corporate 
tax structure, countries in the Nordics, are saying, ``How 
could you have the capital cost structure you have?'' And we 
have the data now. It is not so much that U.S. companies that 
are sitting on, what is it, $1.8 trillion. They are now 
investing in this country because they are not customers. It is 
because their global enterprises and they are optimizing all 
over the world where they are going to do their high-value work 
and so it is a very complex issue. Having a very onerous 
corporate tax structure with all the other things we know, it 
is really just a knife in the coffin now. And when Canada and 
Japan can move very quickly, why can't we?
    Mr. Harper. Yield back.
    Mrs. Bono Mack. The chair recognizes Mr. Pompeo for 5 
minutes.
    Mr. Pompeo. Madam Chairman, thank you.
    Dr. Boushey, there has been some discussion about what we 
did with H.R. 1. We heard lots of criticism from it. Do you 
think there is any connection between job growth and deficit 
spending and projected deficit spending?
    Ms. Boushey. Certainly. In the short run or in the long 
run?
    Mr. Pompeo. I am talking about jobs.
    Ms. Boushey. Yes. OK. Then that is--right now in this 
economy, we continue to have an output gap. We had a crisis----
    Mr. Pompeo. So how much bigger should ARRA have been?
    Ms. Boushey. When we----
    Mr. Pompeo. Ma'am, there is a question. You suggested that 
we don't have enough stimulus so I would like a number about 
how big you think the stimulus should have been to solve the 
problem in Kansas of unemployment.
    Ms. Boushey. It is a compositional problem and it was a 
numbers problem. So Christina Romer, then-chair of the Council 
of Economic Advisors, argued for a stimulus of over a trillion 
dollars. That would have provided a bigger bank for the buck. 
But the second issue is that when the House got ahold of the 
bill--I am sorry. When the Senate got ahold of the bill, they 
changed it and changed the composition of where spending went. 
If you want to make a big bang for your buck in terms of 
government spending at a time of massive recession and massive 
unemployment, you want to spend it on things that have the 
largest multipliers, and Ms. Wince-Smith has provided a nice 
sort of primer on the multiplier effect.
    Mr. Pompeo. I appreciate that, but I would like to reclaim 
my time.
    Ms. Boushey. So you don't want to be spending that on tax 
cuts, you want to be spending it on----
    Mr. Pompeo. All right. So there is a compositional problem. 
So we took $61 billion out of the fiscal year 2011 budget, and 
you think we should have instead added how much money?
    Ms. Boushey. I think we should have retargeted on things 
that would increase investment and increase our spending on 
infrastructure.
    Mr. Pompeo. Thank you. I have heard you offer no solutions 
for what we should have done.
    Ms. Boushey. My testimony has a number of solutions.
    Mr. Pompeo. I appreciate that.
    Mr. Resch, you suggested we should not have visited tax 
credits associated with your industry. I don't know exactly 
what the dollars were that we removed. Tell me, if we put that 
back in the spending bucket, what do you think we should take 
out?
    Mr. Resch. It is specifically a loan guarantee program. It 
is actually not a tax credit. It is $2.5 billion that were 
specifically removed in H.R. 1. And what we are looking at 
reducing is somewhere on the order of $30 billion of economic 
investment that that would drive and somewhere around the order 
of 20,000 to 25,000 jobs throughout the United States, and that 
is just direct jobs in the manufacturing of these facilities. 
You have then all of the manufacturing plants in Michigan and 
all the rest that would support these jobs.
    Mr. Pompeo. Mr. Greenblatt, we heard this morning from EDA 
that they provide grants to various industries and businesses. 
Would your business rather try and chase a grant from the 
Federal Government or have consistently lower tax rates?
    Mr. Greenblatt. If we could have lower tax rates, if we 
could put it on a postcard, you know, this is how much we made, 
this is what our percentage is, this is how much the check is 
going to be for, I would love that. I think every business 
would be happy to give up any grants.
    Mr. Pompeo. I think so too. I spent the last 15 years of my 
life in the manufacturing world until I became part of the 
problem 60 days ago, so I think that is what--I certainly know 
what would have helped my competitors too, not just me, be 
successful.
    Dr. Holtz-Eakin, you have talked about this deficit issue. 
I came to this because it is always tomorrow, so the folks from 
the Center for American Progress and other groups always say we 
have to spend today and we do the savings part somewhere down 
the road. It sounds to me like you think today is the day.
    Mr. Holtz-Eakin. Today is absolutely the day, and the 
evidence is from around the world. I mean, you don't have to do 
theoretical models, just go look at the evidence. Those 
countries who have had massive deficit problems, faced with 
financial crises who needed to fix those and grow, our problem, 
did it by controlling spending, keeping taxes low or even 
cutting it. That is the evidence around the globe. It is 
referenced in my testimony. We should simply copy success.
    Mr. Pompeo. Great. Thank you. I yield back my time, Madam 
Chairman.
    Mrs. Bono Mack. I thank the gentleman and recognize the 
gentleman from West Virginia, Mr. McKinley, 5 minutes.
    Mr. McKinley. Thank you, Madam Chairman.
    Mr. Resch, if I could ask you a question, please. When you 
were asked by someone on the back panel about subsidies, 
getting subsidies in the industry, you answered that by saying 
``grants,'' and then you went on to say in an earlier remark 
you had commented about how coal is a subsidized industry. So I 
am just curious since I think we are supporting the idea of 
R&D, robust R&D in energy, can you share with me, because I am 
wondering if you are being critical of the coal industry and I 
am curious, are you saying outside of R&D the coal companies 
are getting grants? And if you are, could you provide me a list 
of coal companies that are getting grants that are not for R&D?
    Mr. Resch. There are a number of studies that look at the 
entire energy industry and compares what tax incentives and 
what types of programs support those industries. They may not 
be grants directly but I would be more than happy to, 
absolutely.
    Mr. McKinley. I am very curious to see what coal companies 
are getting grants.
    Mr. Resch. They are not specifically grants.
    Mr. McKinley. Because you answered the question when you 
were asked about subsidies. You went immediately to grants. So 
I am assuming you equate the two so----
    Mr. Resch. And I was talking about R&D specifically. I was 
talking about individual companies that were receiving grants 
from DOE.
    Mr. McKinley. Dr. Holtz-Eakin, if I could ask you a 
question. First, thank you for clarifying that gross mid 
representation from Goldman Sachs economic model. I just wish 
the rest of the panel had stayed to hear that 
misrepresentation. If we don't cut spending, if Congress 
doesn't cut spending and we continue this economic growth that 
plods along at 1-1/2 or 2 percent increase, when will we ever 
get back to the historic norms of employment here in this 
country?
    Mr. Holtz-Eakin. It would take a decade, and the good-news 
scenario is one where it takes a decade, we get people back to 
full employment but there is no real productivity growth, there 
is no real rise in standard of living, we leave to our children 
a damaged economy. That is the good-news scenario. The bad-news 
scenario is, we experience something that makes 2008's 
financial crisis look like a minor ripple and then have to pick 
up the pieces afterward. It is not an option. We simply have to 
change course. It is what the President's financial commission 
said. It is very simple.
    Mr. McKinley. So we have to cut?
    Mr. Holtz-Eakin. Yes. It is the right thing to do, and it 
should not be posed as oh, we have to control future growth and 
entitlements, do you want to cut Social Security. No, it is do 
want to leave to our children impaired freedom and prosperity 
or do you want to get the federal spending under control. Those 
are our choices, our real choices.
    Mr. McKinley. Well, help me out on that, Dr. Holtz-Eakin. 
Why doesn't the other side understand that? Have they not had 
real-life experiences? Is this something they have not been 
private sector employers? Why don't people get that? That is so 
fundamental.
    Mr. Holtz-Eakin. I have spent my entire life in economic 
education. I have spent 10 years trying to teach policymakers 
different things, and I decline to answer.
    Mr. McKinley. If you ever get it, I would sure like to hear 
it. Thank you very much.
    I yield back my time.
    Mrs. Bono Mack. The gentleman yields back.
    The chair recognizes Dr. Cassidy for 5 minutes.
    Mr. Cassidy. Thank you, Madam Chair. I am so rarely called 
doctor anymore. I appreciate the remembrance of times past.
    Mr. Greenblatt, hats off to you, buddy. Obviously our 
problem with the unemployed right now is in the non-college-
educated man. That is really where our issues are. And as I 
look at it, the fields that have traditionally addressed that 
have been mining, manufacturing and construction since you use 
one to enable the other to do the other, if you will. The 
President has said that he wants to convert our electrical grid 
to renewables I think by 2035, 90 percent renewables. Now, 
looking at the subsidy of energy, I have here something based 
upon an EIA report from the Wall Street Journal. Effectively, 
wind gets a subsidy of $6.44 million per BTU produced, oil and 
gas $1.9 billion or about .3--basically 300,000 per BTU of 
energy produced. So if to go to a green economy with a green 
energy source, so to speak, was going to triple your energy 
costs by three times, what would that do to your ability to 
compete with other countries?
    Mr. Greenblatt. It is very bad for our energy costs to go 
up, and if you make artificial costs that drive up what it 
takes to make something in America, you are going to hurt our 
jobs.
    Mr. Cassidy. I have heard Chairman Barton say that the road 
to recovery goes through energy, so if your energy is 
inexpensive, that is a competitive advantage relative to other 
countries.
    Mr. Greenblatt. I agree, and not only that, these are 
great, $70,000-a-year jobs.
    Mr. Cassidy. That is what I next wanted to say. It is my 
understanding and my experience in the oil and gas mining 
industry, those are good jobs with good benefits that allow 
people to send their kids to college, et cetera. That is yours 
in manufacturing as well, I gather.
    Mr. Greenblatt. Absolutely. Remember, we have so many 
disadvantages. In China, they pay 30 cents an hour. In Mexico, 
they pay 3 bucks an hour. You know, we pay 20-something bucks 
an hour.
    Mr. Cassidy. So if the cost of your energy is increased by 
EPA regulating CO2 emissions, same effect, correct?
    Mr. Greenblatt. Absolutely. Any more artificial ways to 
drive up our costs are not going to help grow jobs in America. 
We want to grow jobs in America. You have to lower the barriers 
so we can compete more effectively.
    Mr. Cassidy. So if we increase the cost of energy, lowering 
the number of jobs there, by the way, to increase the cost to 
manufacturing lowering the jobs there, by the way, would that 
have an effect upon the ability of the construction industry to 
employ?
    Mr. Greenblatt. Absolutely, because when we have less 
factories or less needs for additions, we need less 
construction workers.
    Mr. Cassidy. So, if you will, if the answer to our problem 
of unemployment among the non-college-educated man, good 
people--my dad was a non-college-educated man. So is mining, 
manufacturing and construction policies which increase the cost 
of energy is a silver stake in the heart of each?
    Mr. Greenblatt. Our mission is to grow jobs.
    Mr. Cassidy. Yes.
    Mr. Greenblatt. And when you increase our costs in America, 
we are not going to grow more jobs in America. You want to help 
us lower our costs. If you take off the shackles, we will beat 
China, we will beat Mexico, we will grow and we will get us out 
of the recession.
    Mr. Cassidy. Now, Mr. Resch, I know you are just over there 
biting your tongue. I can appreciate that. But let me ask you, 
if we equalize the subsidies that went between oil and gas and, 
say, your industry, but made those subsidies permanent, so I 
think I see that currently federal subsidies per megawatt-hour 
for wind are $23 per megawatt-hour, solar, $24, and for coal is 
44 cents, now, the coal is permanent and yours is not, but if 
we said, listen, it is permanent in perpetuity but it is 44 
cents, would you accept that bargain?
    Mr. Resch. I was smiling before because you sound like a 
lawyer, not a doctor. Sorry about that. I don't mean to offend 
you.
    Mr. Cassidy. I will meet you afterwards.
    Mr. Resch. I think what you really need to look at is 
stability over time periods, and the oil and gas industry has 
enjoyed----
    Mr. Cassidy. So if I give you 44 cents per megawatt-hour--
--
    Mr. Resch [continuing]. Since 1916----
    Mr. Cassidy. So for 100 years if you get 44 cents an hour, 
will you accept that as opposed to what you are getting now?
    Mr. Resch. We will be subsidy-free by 2020. Our goal as a 
technology is to drive down costs and to drive down 
regulations----
    Mr. Cassidy. So quick question. To balance the budget, we 
began to phase down those so by 20 whatever, 2023, the subsidy 
is completely gone, would you accept that?
    Mr. Resch. If you do that for all technologies, absolutely.
    Mr. Cassidy. So if went from 44 cents to zero, you would 
accept that?
    Mr. Resch. We would do it, but again, we need enough 
stability to build up the manufacturing base for the next 6 
years, because, remember, coal, nukes and oil have enjoyed 
almost 70 years of subsidies. We have enjoyed just 3 years.
    Mr. Cassidy. If you have subsidies for 20 years, at which 
point does it become stability? I yield back. I am sorry. I 
know I am out of time. I apologize.
    Mrs. Bono Mack. I thank the gentleman.
    I would like to thank our panelists very much. I believe we 
have recognized all colleagues. I want to say that I think it 
has been a very, very informative hearing. It has been a good 
hearing. I want to thank my colleagues and certainly thank the 
ranking member for his indulgence today and his help.
    I would like to remind members that they have 10 business 
days to submit questions for the record, and I would like to 
ask the witnesses to please respond promptly to any questions 
that they receive. So without objection, the chair is also 
going to insert two additional statements for the record, and 
we have previously shared these with the Minority and believe 
that they will improve the hearing record. Without objection, 
so ordered.
    [The information follows:]



    
    Mrs. Bono Mack. So again, this concludes the hearing. Thank 
you all very much for your time.
    [Whereupon, at 12:55 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]



                                 
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